3 growth stocks that could be huge winners over the next decade and beyond

Many people believe that the most important metric for a growth stock is how quickly its earnings grow. While essential to consider, more important is whether a business can show consistently high revenue growth for many years. If a company increases its sales by 20% for 10 consecutive years, chances are the stock is doing well for your portfolio. This is how stocks love Amazon and netflix have become huge winners for shareholders over the past 20 years.

Here are three growth stocks that can be big winners for your portfolio this decade.

1. Coupang: the South Korean Amazon

coupang (CPNG 5.95%) is an e-commerce company operating in the South Korean market. It took inspiration from Amazon by creating its own delivery and fulfillment network across South Korea. With these strengths, Coupang is able to offer many benefits to its premium subscribers that its e-commerce competitors cannot match. This includes same and next day shipping, grocery delivery, video streaming, free returns and product discounts.

Due to this superior value proposition, Coupang has been gaining market share in the South Korean e-commerce industry for many years. In 2021, the company was estimated to hold a market share of 15.7%, up from 7.4% in 2017. This is the main reason why Coupang’s revenue is growing so rapidly, at 27% year-on-year. on the other in its national currency in the last quarter.

Coupang will be able to maintain its high growth rate for several reasons. First, it should continue to gain share in the South Korean e-commerce market. Secondly, there is a general tailwind of e-commerce growth in South Korea, the industry is expected to grow 11% per year until 2025. Thirdly, it is spreading to adjacent opportunities like groceries and food delivery to increase the revenue potential of its existing customers. All of these factors can help Coupang grow its earnings at a strong rate for many years to come, making it an excellent growth stock to consider for your portfolio today.

2. Match Group: Finding Love Online

Like e-commerce, online dating has been a fast-growing industry that is set to reach new heights this decade. Matching group (MTCH -1.01%) is a perfect way to play up this trend. The company owns many popular online dating brands such as Tinder, Hinge, and Match.com.

The online dating category has grown in popularity over the past decade, and much of its growth can be attributed to the rise of smartphones around the world. However, there is still a huge opportunity to grow the category, especially outside of North America and Europe. According to Match Group surveys, 43% of eligible singles have tried an online dating product in North America and Europe. In Asia, this number is only 18%. You shouldn’t expect 100% of singles to use online dating products, but these numbers show that the industry still has room to grow this decade.

Historically, Match Group has an excellent track record of growth and profitability. From 2017 to 2021, it grew its revenue by 22% per year while maintaining an adjusted operating margin of over 35%. In 2022, management expects growth to be somewhat weaker due to poor currency headwinds and recent poor execution at Tinder. This has driven shares of Match Group down in recent months. However, with the long-term tailwind of online dating still intact, I think it’s likely that the company will return to its historic growth trajectory, making the stock a buy right now.

3. Revolve Group: Online Fashion for Millennials

My last stock goes to the e-commerce industry. revolution group (RVLV -2.03%) operates two online fashion websites (Revolve and Forward) that cater to millennial and Gen Z women by selling items like dresses, shoes, and beauty items. The company is currently growing its revenue by 27% year over year and has just reached over $1 billion in annual sales, up from just $312 million in 2016.

The online fashion industry is expected to grow 14% per year through 2025, reaching $180 billion in the United States alone. Revolve will be able to ride this tailwind with its smart influencer ambassador model where it pays popular social media personalities to promote its clothes, attracting new customers to its websites. These new customers are helping Revolve grow faster than the overall market, with 2.1 million active customers in 2022 compared to less than 1 million in 2018. With approximately 70 million Gen Z and Millennial women in US alone, Revolve captured only a small portion of its target consumer.

International growth should be a nice icing on the cake to drive revenue growth in this decade. Only 17% of Revolve’s sales currently come from outside the United States, even though that’s a much larger percentage of the entire fashion industry. Over the next decade, if Revolve can replicate its model of influence internationally, it can help keep revenue growth high.

This combination of industry tailwinds, market share gains and international growth makes Revolve Group an easy buy for growth investors right now.

Brett Schaefer has positions in Coupang, Inc. and Match Group. The Motley Fool holds positions and endorses Coupang, Inc., Match Group and Revolve Group Inc. The Motley Fool has a Disclosure Policy.

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