What is a Tenbagger Stock?
By Ethan Mercer
Financial Technology Analyst • 10+ years in fintech and payments
What is a tenbagger stock? Practical checklist and case studies to find stocks that can multiply 10x. Includes an interactive screening calculator, sample scores, and links to primary sources.
Peter Lynch is one of America's great investors. If you haven't read his One Up on Wall Street (affiliate link) yet, you're in for a treat. Lynch's down-to-earth language explains how the stock market works and how to find great companies in a way that even novice investors can understand. He explains how to turn what you already know into advantages that will help you beat the market.
Everybody wants a tenbagger but most so-called "sure things" are traps. This guide gives a practical checklist, two case studies, and clear risk controls so you can research genuine 10x candidates without falling for hype.
Last reviewed: November 23, 2025.
What is a Tenbagger?
Lynch repeatedly encourages investors to find stocks which will double, triple, quadruple, or otherwise multiply your initial investment. He uses a colorful baseball metaphor to describe the search for a mythical tenbagger investment. He defined a tenbagger stock as one which gives a 900% return. In other words, investing $1,000 will become $10,000.
That's impressive. That's rare.
Lynch postulates that the metaphor comes from baseball ("I suspect this highly technical term has been borrowed from baseball, which only goes up to a fourbagger, or home run." Paperback, Millennium edition, p. 32), where a bag refers to one of the bases. A single hit would be a onebagger, a double a twobagger, a triple a threebagger. In the world of stocks, even a twobagger is a great success!
How to Find a Tenbagger Stock
Where do you find investments this good? Lynch suggests looking for an undervalued company with strong growth potential. This is often a small company with improving unit economics and a runway to scale. Think of Wal-Mart in the early 1970s or Microsoft in the 1980s.
A successful company with big potential is probably entering a new market altogether (Microsoft and PC software) or has a significant advantage (Wal-Mart and its logistics operations) to disrupt an existing market. It needs a strong competitive advantage and effective management, and its market has to be able to sustain dramatic year-over-year growth. (In other words, a company like Apple can re-sell relatively inexpensive consumer iPods and iPhones to millions of people every few years, as each previous generation becomes obsolete, while a company like Tiffany & Co can sell expensive jewelry to a much smaller market.)
Do tenbaggers still exist? They do, but you have to work to find them.
How to Find a Stock That Will Double (or more)!
Stocks that will multiply in value have a few measurable characteristics. Use the checklist below to score candidates quickly.
Screening Criteria (Top 6)
- Revenue growth: target 20% or higher CAGR or a clear early inflection.
- Margin trend: improving gross or operating margins over multiple periods.
- ROIC: greater than 12 percent or clearly improving.
- Dilution trend: stable shares outstanding or capital raises tied to growth milestones.
- Balance-sheet: manageable leverage and a path to positive free cash flow.
- Evidence: accelerating user or unit metrics showing product-market fit.
Quick scoring guide
Score each of 10 checklist items from 0 to 4. A total score over 28 merits deeper research. Any critical red flag (such as negative cash with repeated dilution) disqualifies.
Screening calculator
Score each item 0 to 4. 0 means absent or weak, 4 means excellent. Total and verdict update live.
Frequently Asked Questions
What is a tenbagger? ▼
A tenbagger is a stock that returns roughly 10x the original investment, about a 900% gain. The term was popularized by Peter Lynch.
Who coined tenbagger? ▼
Peter Lynch popularized the term in One Up on Wall Street.
How long does a tenbagger take? ▼
There is no fixed time. Many take several years or decades depending on growth rates and market cycles.
Are penny stocks good tenbaggers? ▼
Penny stocks sometimes spike but often lack revenue, liquidity and governance. Prefer companies with real unit economics.
Which sectors produce tenbaggers? ▼
Scalable sectors such as software platforms, biotech breakthroughs and disruptive consumer tech have historically produced many 10x winners.
Do tenbaggers occur after market crashes? ▼
Bear-market bottoms can create bargains that later compound, but fundamentals remain the deciding factor.
What metrics help spot tenbaggers? ▼
Look for durable revenue growth, improving margins, strong ROIC, low dilution and evidence of product-market fit.
Why do tenbagger picks fail? ▼
Common causes include dilution, weak unit economics, poor execution, competition and overreliance on one-off events.
Is momentum required for tenbaggers? ▼
Momentum can help price appreciation but durable fundamentals and reinvestment capacity are necessary for long-term 10x returns.
How should I use the screening calculator? ▼
Use the calculator to score candidates on key metrics, export results, and prioritize deeper research for those scoring 28/40 or higher.
Case Studies: Microsoft and Wal-Mart
Below are two concise case studies that illustrate the checklist in practice. Use the "Load into calculator" button to prefill the screening tool with the case study scores.
Microsoft (illustrative)
Microsoft found early product-market fit, scaled to platform dominance, and maintained high margins while reinvesting in new growth areas. Early investors who held through multiple cycles captured very large returns.
- Timeline: 1975 founding; 1980s product-market fit; 1990s platform dominance and rapid compounding.
- Sources: MSFT overview; Microsoft investor relations: microsoft.com/investor; SEC filings: SEC filings for Microsoft.
- Checklist score example: 39/40
| Checklist item | Score |
|---|---|
| Revenue growth durability | 4 |
| Margin trend | 4 |
| ROIC | 4 |
| Reinvestment runway | 4 |
| TAM vs competition | 4 |
| Dilution trend | 4 |
| Balance-sheet | 4 |
| Evidence of inflection | 4 |
| Management | 4 |
| Valuation entry | 3 |
Wal-Mart (illustrative)
Wal-Mart scaled via logistics and low-cost distribution, reinvesting cash flows to expand reach and create a sustainable cost advantage.
- Timeline: 1962 founding; 1970s regional expansion; decades of compounding.
- Sources: WMT overview; Walmart investor relations: corporate.walmart.com/investors; SEC filings: SEC filings for Walmart.
- Checklist score example: 36/40
| Checklist item | Score |
|---|---|
| Revenue growth durability | 4 |
| Margin trend | 3 |
| ROIC | 4 |
| Reinvestment runway | 4 |
| TAM vs competition | 4 |
| Dilution trend | 4 |
| Balance-sheet | 3 |
| Evidence of inflection | 3 |
| Management | 4 |
| Valuation entry | 3 |
Finding an undervalued stock is relatively easier (but still not easy). Look for a company with a good market, a competitive edge (an economic moat), and solid financials (to sustain double-digit growth for several years).
Sometimes you can find this in companies which are turning around. These aren't penny stocks of companies facing bankruptcy, but companies which have had their share prices battered by poor financial results or just the whims of the market.
Small companies such as Nautilus or Jewett-Cameron (disclaimer: your author is long on both stocks at the time of writing) have performed nicely in the past couple of years because they were undervalued and largely overlooked by the market. On the other hand, Boeing more than doubled its price in two recent years (disclaimer: your author is also long on it) even though it's one of the largest companies in the world and a member of the DJIA.
There's no secret calculation to make, no target P/E ratio which signifies a potential multibagger. There are no weird tricks or shortcuts to instantly find stocks to quadruple your money.
As Peter Lynch says, you must research several stocks to the possibilities, then look at a few numbers and think about the businesses. You can find great opportunities in the market this way. Some will give healthy 10% or 20% annual returns, but once in a while you'll find an elusive two-, three-, or fourbagger. Maybe even a tenbagger or more, if you're careful and thoughtful and a little lucky.
Investment Disclaimer
This article is for educational purposes only and does not constitute investment advice. Stock prices, financial metrics, and market conditions change constantly. Company examples are provided for illustration and should not be considered recommendations. Always verify current data from official sources such as company investor relations pages or SEC filings, assess your own risk tolerance and investment objectives, and consult a qualified financial advisor before making investment decisions. Past performance does not guarantee future results.