3 Best Stocks Only Grew Revenue by Over 100% Strong sales growth can be a key indicator of things to come.
If You Have Got $3,000 to Invest, All these 3 Best Stocks Only Grew Revenue by Over 100%
Strong sales growth can be a key indicator of things to come.
It might have been difficult to forecast that after losing over a third of its value between mid-February and late March, the broader market would come back back, not just recovering all of its losses, but topping new all-time highs too.
Hidden one of those gains are a few select companies that haven't only continued to flourish from the new standard, but also accelerated already impressive results by increasing revenue by more than 100% year over year in the most recent quarter.
If you have $3,000 which you do not need for immediate expenses or to pad your emergency fund, look at putting it to work in such high-growth companies that could be beating the market for a long time to come.
MercadoLibre: Up 123%
Among the undeniable beneficiaries of these stay-at-home orders resulting from the pandemic is e-commerce. As consumers sought to minimize their chances of contracting the virus, many turned into electronic retail for their shopping needs. As the undisputed leader in Latin American e-commerce, MercadoLibre (NASDAQ:MELI) was well-positioned to serve the requirements of internet shoppers in the region.
The company had a secret weapon too. Mercado Pago, its digital payment system, is among the most popular in the region, having migrated from its e-commerce platform to other websites, before making the jump to brick-and-mortar stores.
The two e-commerce and electronic payments have observed blockbuster adoption during the pandemic, significantly boosting MercadoLibre's outcomes. Throughout the next quarter, earnings grew 123% year over year in local currencies. This has been driven by trade revenue that climbed 149%, whilst fintech earnings grew 86%.
E-commerce remains in its infancy in Latin America, representing roughly 4.2% of overall retail at the close of 2019. For instance, online sales accounted for approximately 12 percent of U.S. retail last quarter. Furthermore, Latin America has double the population of the U.S., at roughly 646 million people, giving it a larger potential market opportunity.
Digital payments are also only gaining a foothold in the area, which has largely been a cash-based society. Recent studies have demonstrated that roughly 70 percent of the population doesn't possess a bank account, and just between 20% and 55% use a charge card, even though that varies by location.
Given that the first innings in both e-commerce and digital payments, and its direction in the region, MercadoLibre still has a lot of gas left in the tank. Additionally, the ability to handle chronic conditions without a visit to the doctor's office during the pandemic was an extra bonus.
Every one of these factors has played into the early success of Livongo Health (NASDAQ:LVGO). The company's Applied Health Signs platform lets patients bypass the trip to their healthcare professional through the use of smart, connected devices, which collect and aggregate information and other vital data, and analyze the information with advanced algorithms and artificial intelligence. The platform then provides customized responses to help patients better manage their chronic ailments.
During the next quarter, the company's flagship offering -- Livongo for Diabetes -- climbed its registered base by 113% year over year, helping to drive earnings up by 125%. But that's just the beginning. Livongo has expanded beyond diabetes control to other chronic conditions, including weight management, hypertension, obesity, diabetes prevention, and behavioral health conditions like anxiety and depression. The company recently reported that over 20% of clients are currently offering numerous solutions for their patientsup from 18 percent last quarter.
That could be only the start. Livongo generated earnings of $170 million final year, but that pales compared to the addressable market, which management estimates at more than $46 billion. This illustrates the vast runway and future expansion potential that remain.
It's well worth noting that Livongo Health will unite with Teladoc Health (NYSE:TDOC) in a deal that is expected to close by the end of 2020.
Zoom Video Communications: Up 355% (No, that's not a typo)
The rapid pivot to distant work that followed the pandemic made it crucial that workers cut out face-to-face meetings, but both email and telephone communications have their own limits. Video conferencing became the technique of choice to substitute many in-person meetings, and possibly no firm was positioned to offer this support compared to Zoom Video Communications (NASDAQ:ZM).
Despite a couple of early missteps,"Zoom" quickly became a verb. Not only did it become the de facto method for employees to conduct meetings, but a lot of friend and family meetups made their way on the video messaging platform. The business offers a free tier with time limits for smaller customers, which some expected would limit the growth of the paid support, but nothing could be further from the reality.
Zoom reported second-quarter earnings that grew 355% year over year, while the amount of business customers generating trailing 12-month revenue of $100,000 or more jumped by 112%. Not only that, the amount of customers with more than 10 employees soared 458%. This marked the second consecutive quarter of triple-digit earnings growth.
Among the trade-offs that typically accompanies high-growth investments is the equally high sticker price. MercadoLibre, Livongo Health, and Zoom Video Communications game forward valuations of 17, 39, and 51, respectively, if a price-to-sales ratio of between 1 and 2 is considered reasonable. The recent run-up in each company's stock price has been a contributing aspect to those pesky valuations.
That said, if those high-flyers can continue to place up earnings growth at or near 100 percent -- that isn't too much of a stretch -- those costs will seem like relative deals in the upcoming decade.