Multibagger stocks are equity stocks that generate returns multiple times higher than their associated cost of acquisition. The term was coined by Peter Lynch in his 1988 book One Up on Wall Street and refers to stocks that give returns of more than 100% . For example, a ten-bagger is a stock that gives returns equal to 10 times the investment, while a twenty-bagger stock gives a return of 20 times. Multibagger stocks are especially common when discussing high-growth industries and emerging markets such as the BRICS.

To identify multibagger stocks, investors should look for companies with high revenue growth, large addressable markets, and disruptive potential. Multibagger stocks tend to have excellent research and development skills, sound management and production techniques, and generate high demand in the market. They are issued by companies that have tremendous growth potential and demonstrate the ability to generate high levels of growth, generally more than 20% for several years.

Investors should practice caution in assessing multibaggers, as past performance is no guarantee of future returns, and multibag returns may be indicative of either sustained growth or an investment bubble. Some examples of multibagger stocks include Amazon, Tesla, and Netflix.