For the past 12 years, growth stocks have been all the rage on Wall Street. This shouldn’t come as a surprise given that historically low lending rates and ongoing quantitative easing measures from the Federal Reserve have made borrowing cheap. With abundant access to…
capital, fast-paced companies have been free to innovate, hire, and acquire.
Typically, we see the fastest sales growth from smaller companies. But that’s not the case for the following four large-cap stocks (i.e., companies with a market cap of at least $10 billion). Based on Wall Street’s consensus estimates, these hypergrowth large-cap stocks are expected to increase their sales 508% to 1,118% by 2024.
Nio: 560% implied sales growth by 2024
It’s no secret that electric vehicle (EV) manufacturers are set up perfectly to benefit from a multi-decade replacement cycle for consumer and enterprise vehicles. Nio‘s (NYSE:NIO) opportunity within EVs is perhaps even more impressive given that it’s based in China, the world’s largest auto market.
According to Wall Street, sales for Nio are expected to catapult from $2.55 billion in 2020 to $16.83 billion by 2024. For those of you keeping score at home, that’s a 560% projected sales increase.
Initially, Nio’s expansion was slowed by capital concerns. it’s difficult to build an auto stock from the ground up. However, with the company now sitting on billions in cash, it’s simply waiting for the global semiconductor shortage to right itself. Even with this shortage, Nio’s monthly deliveries hovered around 8,000 in June and July. The company looks to be well on its way to reaching a 150,000-vehicle annual run rate, once the global chip shortage is addressed.
Equally exciting is Nio’s unique battery-as-a-service venture, introduced one year ago. This program is designed to allow buyers of its premium EVs to upgrade or replace their batteries in the future. Consumers also receive a discount off the initial sticker price of the vehicle they’re buying. In return, buyers pay a monthly subscription fee, which is high margin and will likely boost brand loyalty.
Nio will require patience from its shareholders, but all operating metrics look to be headed in the right direction.
Snowflake: 508% implied sales growth by 2024
Perhaps it’s no surprise that a cloud stock should be one of the fastest-growing large caps. Cloud data-warehousing company Snowflake (NYSE:SNOW) is expected to increase sales from the $592 million reported in fiscal 2021 to an estimated $3.6 billion by fiscal 2025. That’s a 508% jump in just four years.
What makes Snowflake such a fast-growing company is its unique business approach. For instance, it has shunned subscriptions in favor of a more transparent pay-as-you-go model for its customers. The company also built its platform atop the leading cloud infrastructure services. While it can be difficult for businesses to share data when they have that information stored on competing platforms, Snowflake allows its users to share data seamlessly.
Through the first six months of fiscal 2022, sales have more than doubled, and its net retention rate in the second quarter actually expanded 1 percentage point to 169% from the sequential first quarter. In plainer English, this means existing clients spent 69% more in the second quarter of 2022 than they did in the comparable year-ago quarter.
Snowflake’s sales growth has thus far shown no signs of slowing. The only question is: Can Wall Street and investors tolerate the company’s nosebleed valuation with profitability still a ways off? At roughly 75 times Wall Street’s forecasted sales for 2021, the jury is still out.
Novavax: 1,118% implied sales growth by 2024
Among biotech stocks, you’ll struggle to find a company that’s expected to grow faster than Novavax (NASDAQ:NVAX). After bringing in $476 million in full-year sales in 2020, the consensus is calling for approximately $5.8 billion in revenue by 2024. That’s a projected increase of more than 1,110%!
The reason Novavax should see its sales soar is…
Continue reading at THE MOTLEY FOOL