Many terrific businesses seem unstoppable — based in part on their past robust growth as well as on their growth prospects. Here are brief introductions to five contenders you might consider for your portfolio. With $25,000, you might park $5,000 in each, but you can…
choose just one or two, and you can, of course, invest less if you don’t have $25,000 burning a hole in your pocket.
Datadog (NASDAQ:DDOG) offers companies a cloud-based monitoring and security platform. Its stock has been on a tear in its short time on the public markets, more than tripling in value in about two years — with an average annual growth rate of nearly 90%.
The stock is popping because the company is. In its second quarter, revenue grew 67% year over year to $234 million, while its number of larger customers generating $100,000 or more in annual recurring revenue rose 59%. Datadog has partnerships in place with some rather sizable and prominent tech businesses, too, such as Microsoft and Salesforce.com, and it keeps adding to its offerings, making for a “sticky” environment that many customers won’t want to leave.
2. Palo Alto Networks
Palo Alto Networks (NYSE:PANW) is a global leader in cybersecurity, something few individuals or companies would want to be without these days. The company’s stock has surged roughly ninefold over the past nine years, averaging an annual return of about 27%. (For some context, the S&P 500 averaged closer to 15% over the same period, which is still far above average.) Palo Alto’s future looks bright, too.
In its recent fiscal year-end presentation, the company noted that it more than doubled the number of major product releases between fiscal 2019 and 2021, with 29 of them in 2021. In its impressive fourth quarter, revenue was up 28% year over year and total billings rose 34%. In the fourth quarter conference call, chair and CEO Nikesh Arora noted:
As a company, we’ve continued to focus on getting more presence in our customers and getting larger deals with them. I’m delighted to say, we had 18 customers sign transactions over $10 million in the quarter. We had our first customer that surpassed $100 million in their booked business during the fiscal year as they standardized for Palo Alto Networks across the entire enterprise. And our Millionaire customers were up to 986 in Q4, approximately up 30% for the third quarter in a row.
3. PayPal Holdings
PayPal Holdings (NASDAQ:PYPL) may need little introduction, but many people don’t appreciate what a big business it is — with a recent market value topping $300 billion. That’s partly due to the fact that PayPal is more than just PayPal. It also encompasses other services, such as the popular payment app Venmo. As of its second quarter, it had 403 million active accounts, and 4.7 billion payment transactions, with a total payment volume of $311 billion.
PayPal’s stock has soared more than 600% since the summer of 2015, when it was spun off by eBay, representing an average annual growth rate of about 37%. The company does face…
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