The COVID-19 pandemic has wreaked havoc on both our personal and professional lives since the start of 2020. Equity markets have been extremely volatile and uncertainty continues to loom large as we head into the fourth quarter of the year.
It is quite possible that…
another market crash is on the cards given falling GDP figures and high unemployment rates. Whether or not the market corrects once again, investors can take advantage of underlying conditions to identify quality growth stocks and hold them over the long-term.
When it comes to investing in growth stocks, just a handful of companies have the potential to grow your wealth multifold and generate market-beating returns. Here we take a look at three such stocks that you can buy for long-term gains: Paypal (PYPL), Etsy (ETSY), and MongoDB (MDB).
A digital payment company
The first stock in the list is PayPal (PYPL), a fintech company, and one of the largest digital payments platforms in the world. PayPal’s platform enables digital and mobile payments for consumers and merchants all around the globe.
It has a portfolio of payment solutions that include PayPal, PayPal Credit, Venmo, Xoom, Braintree, and iZettle. This product expansion has helped the company increase revenue and earnings at an astronomical pace over the years.
PayPal’s revenue has increased from $10.8 billion in 2016 to $17.8 billion in 2019. Analysts expect revenue to grow by 20.4% to $21.4 billion in 2021 and 19.3% to $25.5 billion in 2022.
In 2019, PayPal managed to increase its active accounts by 14% to 305 million. Comparatively, it processed 12.4 billion payment transactions, up 25% while total payment volume processed grew 23% year-over-year to $712 billion.
In the second quarter of 2020, PayPal’s total payments volume rose 29% to $222 billion and it added 21.3 million new users as well. The company expects to add 70 million net new active accounts in 2020.
The COVID-19 pandemic has acted as a major tailwind for e-commerce companies and this has also helped PayPal add users at a stellar pace in 2020. Its revenue rose 22% to $5.6 billion while free cash flow grew by an enviable 112% to $2.2 billion.
PayPal’s robust revenue and earnings growth in the last five years has meant the stock is up 500% since October 2015. PayPal stock is trading at a forward price to earnings multiple of 51x which might be considered expensive. However, analysts forecast earnings to grow by 24% annually in the next five years.
An e-commerce platform
The COVID-19 pandemic has changed consumer behavior drastically in a matter of a few months. Total e-commerce sales now account for 16% of retail sales, up from 11% at the end of 2019. This meant e-commerce platforms such as Etsy (ETSY) have experienced staggering growth this year, while traditional retail stores have been decimated.
Etsy is an online marketplace for unique and creative goods. It connects millions of buyers and sellers all over the world and ended Q2 with…
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