the top growth stock I’d snap up with £1k

I believe one in all the finest shares to purchase now’s top growth stock Team17 (LSE: TM17). Last 12 months was a blowout efficiency interval for this world gaming group. It launched extra titles than any earlier 12 months, producing total income growth of 34%.With a revenue margin of 47%, pre-tax earnings jumped 36% year-on-year to £26.2m.Whenever I have a look at growth shares, I’m all the time cautious about their long-term potential. I usually see firms report one or two years of spectacular growth however wrestle to take care of this trajectory.This is particularly true with small- and medium-sized companies. These usually wrestle to compete in opposition to bigger opponents, which transfer rapidly to defend their market share. However, I believe there’s a superb probability Team17’s growth isn’t only a flash in the pan. That’s why I imagine that is one in all the finest shares to purchase now and I’d make investments £1,000 in the enterprise.Best shares to purchase nowOver the previous six years, the firm’s gross sales and earnings have grown at a compound annual price of 52% and 48% respectively.There are two components behind this file. Firstly, Team17 has been investing closely in its product pipeline, creating new video games and merchandise which have in the end helped it enter new markets and purchase new prospects.It seems as if this pattern will proceed. The firm has a various pipeline of launches scheduled for this 12 months. What’s extra, final 12 months, it elevated its headcount by 25% and purchased Yippee Entertainment Limited, which helped the agency set up a brand new improvement studio in Manchester.This ever-growing workforce of builders and creatives ought to underpin the group’s growth plans.As effectively as investing for the future, Team17 additionally earnings from previous releases. Sales from its again catalogue of video games made up 78% of revenues in 2020. This is basically a passive earnings stream for the group that prices nothing to provide.And the extra video games the firm can develop, the bigger its again catalogue turns into. This generates extra recurring income, which might then be used to create new merchandise. And the circle continues.Story continuesPortfolio of growth stocksTeam17’s growth plans and the firm’s ever-growing again catalogue are the two the reason why I’d purchase this enterprise for my portfolio of growth shares. Few different companies exhibit these qualities, which is why I imagine that is one in all the finest shares to purchase now.Unfortunately, like all investments, the firm’s growth isn’t assured. Potential dangers embody mental property challenges, rising staffing prices and better advertising prices. The agency might also wrestle if a extra vital competitor decides to edge into its market.Indeed, with a market capitalisation of round £918m, at the time of writing, Team17 remains to be a comparatively small enterprise in the world of know-how.Despite these dangers and challenges, I’m excited by the firm’s future potential. That’s why I’d purchase the gaming stock for my portfolio with £1k right this moment.The put up Best shares to purchase now: the top growth stock I’d snap up with £1k appeared first on The Motley Fool UK.More readingRupert Hargreaves has no place in any of the shares talked about. The Motley Fool UK has no place in any of the shares talked about. Views expressed on the firms talked about on this article are these of the author and due to this fact might differ from the official suggestions we make in our subscription providers corresponding to Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we imagine that contemplating a various vary of insights makes us higher buyers.Motley Fool UK 2021