In the last 12 months, the Vanguard Growth ETF (NYSEARCA:VUG) has declined by 15.8%. This is a small reflection of the performance of growth stocks last year, as dozens of growth stocks have declined by more than 50% during the same period.

It finally seems that the worst is over for the broader markets. From deeply oversold levels, sentiments have reversed in the first two months of 2023. However, several growth stocks remain massively undervalued. It’s an excellent time to consider some multibagger growth stocks to buy for the next few years.

Among growth stocks, some companies are in the limelight. Few others are hidden gems that can potentially deliver multibagger returns but are flying under the radar. I focus on discussing these sleeper growth stocks to buy that represent companies with sound business fundamentals.

Let’s discuss why these stocks are attractive and poised for multibagger returns.

Lithium Americas (LAC)

Lithium Americas (NYSE:LAC) stock has remained subdued in the last 12 months. However, a big breakout on the upside seems impending for this lithium mining stock. The reason is sustained positive developments on the business front.

In January, the company signed an agreement with General Motors (NYSE:GM) for joint development of the Thacker Pass mine. General Motors has infused $650 million equity, and construction in the project has commenced this month. It’s worth noting that the asset has a net present value of $4.95 billion. Once production begins, the asset will be a cash flow machine.

Additionally, Lithium Americas has a 44.8% stake in an asset in Argentina. The company will be splitting the international assets into a separate entities. This is likely to translate into value unlocking.

Therefore, with favorable tailwinds for lithium coupled with quality assets, LAC stock is among the multibagger growth stocks to buy.

Leonardo DRS (DRS)

Leonardo DRS (NASDAQ:DRS) stock is a potential multibagger from among defense stocks. In the last six months, DRS stock has trended higher by 35%. In my view, this is just the beginning of the uptrend.

As an overview, the company was formed after Leonardo DRS and Rada Electronic merged.

The former is a provider of advanced defense electronics products and technologies. Rada is focused on tactical radars. The company believes the combined entity has an addressable market of $22 billion. This provides ample headroom for growth.

An important point to note is that Leonardo DRS reported a leverage ratio of 0.7x as of Q2 2022. With positive free cash flows, the company has the high financial flexibility to pursue organic and inorganic growth. Leonardo currently derives most of the revenue from the U.S. army and navy. It seems very likely that the company will expand in Europe. This is another catalyst for revenue upside.

Overall, global defense spending will likely trend higher in the coming decade. Leonardo DRS seems to be among the best growth stocks in the sector.

Curaleaf Holdings (CURLF)

Curaleaf Holdings (OTCMKTS:CURLF) is possibly among the cheapest cannabis stocks. Delay in federal-level legalization of cannabis has depressed sentiments. However, the company looks strong financially, and business developments have remained positive.

One reason to like Curaleaf is the fact that the company is present in 21 states in the U.S. In a legalization scenario, Curaleaf is positioned for robust growth.

In general, cannabis companies have suffered from significant cash burn. Curaleaf has done well in terms of cost control, and the company reported an adjusted EBITDA margin of 25% for Q3 2022.

Another reason to be bullish is the possibility of accelerated revenue growth. The company has 15 new products in the active pipeline for launch. Additionally, more than 50 product ideas are in the front-end innovation process. Significant investment in R&D will ensure that healthy growth sustains and margin expansion continues with operating leverage.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.