2 stocks that could be worth more than Tesla by 2030
Few stocks have performed as well as You’re here (TSLA -3.00% ) during the last decade. With fervent investor optimism and rapid revenue growth, the electric vehicle (EV) maker now has a market capitalization north of $1 trillion, making it one of the fastest growing companies. precious in the world.
As investors try to find the next wave of stocks with the potential to beat the market, it may be worth revisiting the recipe for a stock like Tesla, or one of the tech giants, to achieve values. merchants as high.
To reach a market capitalization of over $1 trillion in this decade, a company needs three basic criteria:
- A revenue base already in the billions.
- A huge Total Addressable Market (TAM).
- A track record of rapid, high-end growth.
Airbnb (ABNB -2.02% ) and coupang ( CPNG 0.23% ) fully meet these criteria. Here’s why they could be worth more than Tesla by 2030.
1. Airbnb: redefining travel
Airbnb is a travel marketplace where individuals can charge travelers to stay at properties they own. These properties can be anything from megamansions in Beverly Hills to treehouses in the rainforest of Australia; essentially, they allow people to stay in unique places that are different from hotels. The idea was started by Brian Chesky and two others in 2008, and since then the platform has grown like gangbusters. Today, Airbnb has a market capitalization of $105 billion.
In 2021, the company had 300 million nights and experiences booked on the platform, up 56% year-over-year as the world slowly recovered from the COVID-19 pandemic. However, nights booked are still down 8% from 2019, showing that travel has still not fully recovered around the world. Revenue was $6 billion in 2021, up 77% year-over-year, and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $1.6 billion . This gives the company a profit margin of 26.6% even against the headwind of the pandemic.
Airbnb therefore meets two of the three criteria with a broad revenue base and strong revenue growth. But what about the TAM? The travel and tourism industry is one of the largest in the world, with $9.2 trillion worldwide in 2019 (the past two years have been weaker due to the pandemic). Airbnb currently only serves part of the industry and has many competitors like hotels and other travel platforms like Booking.com and VRBO. But with so much consumer spending each year, Airbnb’s annual revenue has a very high ceiling.
With an excellent growth track record, huge market opportunity, and high profit margins, I believe Airbnb has a chance of reaching $1 trillion in market capitalization by 2030.
2. Coupang: South Korea’s Amazon
Coupang is an e-commerce company in South Korea with a similar business model to Amazon‘s. It has a wide selection of products as well as its own fulfillment and delivery network, which gives it an edge over its competitors. This helped Coupang quickly gain e-commerce market share in Korea, rising from 7.4% in 2017 to 15.7% last year. Like Amazon, Coupang also offers a premium subscription service called Rocket WOW that offers free shipping and special perks. It had 9 million members at the end of 2021.
Coupang generated $18.4 billion in revenue last year, up 54% year-over-year. As you can see from its market share, it still has room to grow in its home market. Yet, to have a chance of becoming a trillion-dollar company, it will have to grow. Fortunately, he already has a ton of initiatives to make it happen. First, in addition to its e-commerce platform, it is launching an advertising and video streaming business (again, similar to Amazon) which will hopefully increase spending and profitability. Second, it’s expanding outside of traditional e-commerce into groceries and food delivery. Third, it plans to expand outside of South Korea to Singapore, Taiwan, Japan, and potentially other parts of Southeast Asia.
Unlike Airbnb, Coupang has low margins, generating less than $3 billion in gross profit last year and a net loss. This means it will likely need to have a much larger revenue base by 2030 to reach a market capitalization of $1 trillion. But with nearly $20 billion in revenue already, steady market share gains, new business initiatives and international expansion, I believe Coupang can grow its revenue at a high rate for a long time.
While it is clear that Coupang and Airbnb have a chance of reaching a market capitalization of $1 trillion, you must remember that any investment involves risk. Nothing is guaranteed in the stock market, and if you buy one of these stocks, you are not guaranteed to have above-market returns over the next decade. But right now, both companies are showing promise worth considering.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.