NFLX

Netflix, Inc.

184.06
USD
-0.98%
184.06
USD
-0.98%
162.71 700.99
52 weeks
52 weeks

Mkt Cap 81.46B

Shares Out 442.60M

Chat
Send me real-time posts from this site at my email

Want 10X Returns? 2 Monster Growth Stocks in the Making

Peter Lynch managed Fidelity's Magellan Fund for 13 years. Under his stewardship, the fund generated an annualized return of 29%, earning Lynch a reputation as one of Wall Street's top stock pickers. While his wisdom cannot be condensed into a single sentence, this quote is worth remembering: "You only need a few really big stocks in a lifetime to make a lot of money." When you buy a stock, you can't lose more than 100% of your investment, but if you've built a portfolio of high-quality stocks, chances are some of those investments will increase severalfold in value. For instance, I think Latch (NASDAQ: LTCH) and Docebo (NASDAQ: DCBO) could both produce 10x returns in the next decade. Here's why. 1. Latch Latch is modernizing apartments and commercial offices with smart building technology. Its software, LatchOS, powers a lineup of first-party hardware devices, including door-mounted access controls, delivery assistants, intercoms, and cameras. Latch technology creates a premium experience for residents and employees, allowing them to unlock doors, admit guests, and control smart home devices from a mobile app. Latch also streamlines workflow for property managers and building staff, enabling them to control access permissions remotely. Latch has achieved a particularly strong presence in apartment buildings. In fact, over 30% of new apartments in the U.S. are built with Latch smart locks, and the driving force behind that success is its comprehensive portfolio. While most rivals focus on one part of the smart building experience, Latch is a one-stop shop for clients, providing all the hardware, software, and services they need. Not surprisingly, that competitive edge has resulted in rapid growth. Latch posted revenue of $41 million in 2021, up 129% from the prior year. And total bookings came in at $360 million, up 118%, implying strong future revenue growth. On a less optimistic note, Latch generated negative free cash flow of $115 million over the past year, but the company has $284 million in cash and investments on its balance sheet. More importantly, Latch should be free cash flow positive by 2023, according to management. Here's the big picture: Latch has achieved a strong foothold in U.S. apartment buildings, and it recently expanded into commercial office buildings. Currently, management puts its market opportunity at $54 billion in the U.S., and expansion into Europe would add $90 billion to that figure. In short, Latch has a tremendous runway for future growth, and despite the fact that it's losing money, I think this business -- currently valued at $563 million -- could easily generate 10x returns over the next decade. 2. Docebo Employee turnover rates have increased 88% since 2010, according to Work Institute. That's a big problem for employers. When you total all the expenses -- lost productivity, the time spent on hiring, and the time spent training new employees -- turnover costs U.S. businesses about $1 trillion each year. But workplaces that offer ongoing training opportunities often see lower turnover rates and greater productivity. That's where Docebo can make a difference. Docebo's learning management system simplifies training for employees, partners, and customers. In addition to ready-made courses, its platform leans on artificial intelligence to convert corporate resources into training material. Docebo then allows clients to deliver, track, and measure the impact of learning against business metrics. It even personalizes the experience for each employee to drive engagement, and it allows administrators to inject training content into daily workflow to promote a culture of continuous development. The Financial Times recently recognized Docebo as one of the fastest-growing companies of 2022, and Fosway Group has named Docebo an industry leader for five consecutive years. That competitive edge has helped the company win big customers like Amazon Web Services and Netflix. Better yet, it has translated into solid financial results. Last year, Docebo grew its customer base 29% to 2,805, and the average customer spent 13% more, demonstrating the stickiness of its platform. In turn, revenue climbed 66% to $104 million in 2021. And while Docebo generated negative free cash flow of $4 million, with $215 million in cash on its balance sheet, the company can afford to burn money at that pace for many years as its business scale. Looking ahead, management puts its market opportunity at $38 billion by 2026. Given the costly nature of employee turnover and Docebo's solid competitive position, I think this business -- currently valued at $1.6 billion -- could grow tenfold in value over the next decade. 10 stocks we like better than Latch, Inc. When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Latch, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 7, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine owns Amazon. The Motley Fool owns and recommends Amazon, Docebo Inc., Latch, Inc., and Netflix. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue