If you are looking to accelerate your retirement by a few years, investing in growth stocks will help you achieve your goal. Technology growth stocks are generally a good bet given their debt-free balance sheet, high profit margins and ability to easily scale their business without huge capital investments.
Further, tech companies have been able to easily outperform the broader markets amid the ongoing pandemic. Here, we look at three tech stocks that could make you a fortune in the upcoming decade.
A network management service
The first stock on the list is Real Matters (TSX: REAL), a company that integrates its proprietary technology and network management capabilities to create a marketplace for mortgage lending and insurance industry services.
The company has forecast its total addressable market at US$13 billion. In fiscal 2019, its total sales were $102.08 million which means Real Matters has enough room for growing its top-line at a rapid pace in the long-term.
Real Matters works with 60 of the top 100 mortgage lenders in the U.S. and its client retention rate stands at an enviable 95%. It has established a track record of profitable growth and achieved a positive EBITDA since fiscal 2012.
In fiscal 2020, analysts expect Real Matters sales to grow by 56% year-over-year to $159.2 million and by 29% to $205.54 million in 2021. Comparatively, its earnings per share are forecast to grow at an annual rate of 57% in the next five years.
This means Real Matters stock has a forward 2021 earnings per share of 38 and a 5-year PEG ratio of 0.70 makes it a top stock to buy and hold right now.
A tech stock for your supply chain
Canada-based Kinaxis (TSX: KXS) provides cloud-based software-as-a-service (SaaS) solutions that give enterprises the tools to manage supply-chain volatility. Kinaxis stock went public back in June 2014 and has returned 1,450% since its IPO.
This spectacular run has meant that the stock is valued at a market cap of $5.41 billion. It also means Kinaxis is trading at a forward price to sales multiple of 24.6 which might seem expensive.
While Kinaxis stock might be volatile in the short-term every major dip should be viewed as a buying opportunity. Kinaxis has managed to increase sales from $91.3 million in 2015 to $191.5 million in 2019. Its subscription sales rose from $65 million to $119 million in this period while adjusted EBITA almost doubled to $57.7 million.
Kinaxis solutions are targeted at multiple industries including electronics, aerospace and defense, industrial, healthcare, automotive, and consumer goods. The company forecasts its total addressable market to grow from $3.8 billion in 2017 to $10.5 billion in 2022.
A Robinhood favourite
One of the most popular stocks in the retail investing app, Robinhood, is PayPal (NASDAQ: PYPL). This digital payment solutions company is used by consumers and enterprises worldwide. Similar to most other tech companies, PayPal has also benefitted from the COVID-19 pandemic.
Its revenue was up 22% year over year in the June quarter. Further, the company has forecast net new active customers to rise by 70 million in 2020, which is twice the number of net additions compared to recent years.
The COVID-19 pandemic has accelerated the shift toward digital payments and in the recent call, PayPal CEO Dan Schulman said, “In the midst of the COVID pandemic, we have seen substantial macro changes that we believe will have a lasting and profoundly positive impact on our business.”
PayPal stock has returned 462% since July 2015 and is a top pick for long-term growth investors.
