Investors hoping to make it big in the stock market should focus on growth stocks. As the term suggests, these are stocks that are poised to grow rapidly over the coming years and could potentially reward shareholders greatly. However, it’s important to note that growth stocks tend to be younger companies. As such, there’s less history to base company performance on. In addition, there may be stiffer competition and hurdles relating to regulations and consumer appeal.
However, if investors can find the right growth stocks to hold onto for a decade or longer, then it’s very possible that they could see major growth. We’ve seen many great stocks in our own backyard reward shareholders many times their initial investment. In this article, I’ll discuss two great growth stocks that investors should consider holding for the next 10 years.
Invest in the e-commerce space
My top growth stock to invest in over the next 10 years is Shopify (TSX:SHOP). For those that are unfamiliar, this company operates in the massive and ever-expanding e-commerce industry. Shopify differs from its competitors in that it provides merchants of all sizes with a platform and many of the tools necessary to operate online stores. It’s estimated that more than one million merchants use Shopify’s platform worldwide.
In terms of its financials, Shopify continues to impress. In its second-quarter (Q2) 2023 earnings presentation, the company reported US$1.7 billion in quarterly revenue. That represents a 31% year-over-year increase. That suggests that Shopify’s revenue growth could be ramping up again. In 2022, the company saw a 21% year-over-year increase in annual revenue compared to 2021.
Much of this revenue comes from recurring sources. Shopify’s monthly recurring revenue continues to grow and now clocks in at a compound annual growth rate of 32% over the past five years.
I can definitely see Shopify continuing to grow from this point. The company has three main ways of growing its business. First, it can increase the number of merchants that use its platform. Second, it can grow alongside its merchants. Simply put, the more its merchants make, the more Shopify makes. Finally, the company plans to continue expanding its service and product offerings.
If you’re interested in a solid growth stock, don’t forget to consider investing in Shopify.
Take advantage of a changing healthcare industry
There’s no question that the healthcare industry is an area that is ripe for disruption. We’ve seen many companies try to make their mark in this industry by changing the face of it completely. That’s essentially what’s given rise to the telehealth industry. By enabling patients to use telehealth services, healthcare becomes a lot more accessible. This was immensely important during the COVID-19 pandemic, and it has only continued to rise in penetration.
WELL Health Technologies (TSX:WELL) is a leader among Canadian telehealth companies. It has managed to penetrate the massive American healthcare industry and offers a very interesting suite of services. This includes its primary health clinics, WELL Health’s different telehealth services, and an online marketplace where healthcare providers can purchase software solutions to help boost their own telehealth services.
Over the past five years, WELL Health stock has gained more than 700%. With telehealth still near the advent of its growth journey, I predict that this stock could be much larger over the next decade.