It’s no secret that growth stocks They took it on the chin for the last year. Pioneer NASDAQ Composite It fell 33% in 2022, marking one of the worst performances since the global financial crisis in 2009. Economic growth is slowing due to a strong combination of high inflation, weak growth and high interest rates.
These problems may loom large on the horizon now, but when kept in mind, they are only indicators of the longer term as markets and economies always eventually recover. The good news is that there are companies that continue to display strong growth even with these headwinds, and when a bear market reverses into an uptrend, these stocks should have stronger support for their share prices.
Here are two growth stocks that you can group together that are prime candidates for the next bullish round.
twilio (TWLO -2.99%) It has come a long way in helping employees and corporate executives communicate better. The company offers Customer Platform as a Service (CPaaS), and was named the number one customer data platform by IDC for 2021.
Twilio has shown strong growth over the past three years, more than doubling revenue from $1.1 billion in 2019 to $2.8 billion in 2021. During the first nine months of 2022, the company’s top line continued its upward momentum, jumping 40.2 percent. % on an annual basis. to $2.8 billion, actually bringing in the revenue that it generated in the entire prior year.
On top of that, Twilio has also been building its customer base, reporting 280,000 active customer accounts for the third quarter of 2022 compared to 250,000 a year earlier. Although the dollar-based net rate of expansion dropped from 131% a year earlier to 122%, it remained above 120% and healthy.
CEO Jeff Lawson also announced the expansion of Twilio’s Customer Engagement platform to enhance user experience and security with passwordless login. The company has partnered with more than 56 mobile operators in 30 countries to enable customers to be identified by verifying their devices and phone numbers, thus helping to authenticate users without having to memorize their passwords.
It looks like the growth is set to continue, as detailed in Twilio’s recent Investor Day presentation. The company believes it can cross-sell its services to increase its top line amidst many lands and expand opportunities. A three-pronged approach targeting product developers, data analytics and customer experience will be deployed.
To do this, Twilio will partner with consulting, platform and technology partners to realize its vision of a robust and trusted customer engagement platform. The customer engagement and messaging software market continues to grow at a rate of 13% annually from 2022 to 2025, with the total addressable market set to reach $116 billion by then.
Twilio may occupy only a small part of this profitable pie, but this looks set to expand in the coming years.
Budding entrepreneurs are taking advantage of this Shopify‘s (store -2.03%) The platform to help them set up their business online easily.
The e-commerce company saw a surge in demand for its services at the start of the pandemic as more people started home businesses amid restrictions on movement. Many people have also started side struggles as a way to diversify their sources of income away from their salaried jobs, thus increasing the number of merchants on the Shopify platform.
Total revenue rose from $1.6 billion at the end of 2019 to $4.6 billion two years later, and the first nine months of 2022 saw Shopify grow nearly 20% in revenue year-over-year.
Although demand is expected to return to normal this year, Shopify still has a lot going for it. First, the company’s digital advertising tools make use of its merchant data Provide valuable insightsallowing companies to bypass an AppleNew privacy procedures. As a result, the tech giant the alphabet and a social media giant Meta platforms Partnership with Shopify.
In the middle of last year Shopify also acquired Deliverr Inc for about $2.1 billion to boost its fulfillment network and offer next-day delivery options in the US These moves will no doubt help boost Shopify’s presence and make it the most trusted e-commerce player, helping it to attract more merchants to its platform.
Shopify is also investing more in building customer relationships, streamlining logistics, and going global. It launched Collabs to enable merchants to collaborate and find creatives who can help reach a larger audience, and it launched POS Go to simplify the selling process for merchants with just one device. Shopify Payments also expanded to 22 countries last quarter, while Shopify Capital helped many merchants access much-needed financing and loans.
The company is transforming into an all-in-one e-commerce player with multiple functions and is steadily expanding its international presence. These strategies take time to play into play, but Shopify is moving in the right direction. Although 2023 may be a slower year for the company, it continues to devote money and resources to building capabilities that will position it to continue expanding its top and bottom line into the future.
Susan Fry, an executive director at Alphabet, is on the board of directors of The Motley Fool. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, sits on The Motley Fool’s board of directors. Royston Yang He has positions at Alphabet, Apple, and Meta Platforms. The Motley Fool has positions at Alphabet, Apple, Meta Platforms, Shopify, and Twilio. The Motley Fool recommends the following options: January 2023 long calls of $1,140 on Shopify, March 2023 long calls of $120 on Apple, January 2023 short calls of $1,160 on Shopify, and March 2023 short calls of $130 on Apple. The Motley Fool has a file Disclosure policy.