SHOP:CC - 3 High-Growth Stocks That Could Be Worth $1 Trillion in 10 Years
2024-03-14 15:45:00 ET
The Toronto Stock Exchange has yet to produce a company worth $1 trillion. In the U.S., Apple , Microsoft , and NVIDIA are US$2 trillion club members already. Amazon.com , Alphabet , and META Platforms , all high-growth stocks, could be members soon.
Canada isn’t lacking in growth stocks , although hitting one trillion in market cap is a moonshot. Still, three companies with high-growth potential could achieve the milestone in 10 years (or maybe more).
E-commerce giant
In March 2020, Shopify ( TSX:SHOP ) dethroned Royal Bank of Canada as the TSX’s most valuable company. The e-commerce giant’s market cap surged to $121.3 billion. Unfortunately, the reign was short-lived as the big bank reclaimed the top position one year later.
Shopify’s market cap stands at $136.66 billion as of this writing. However, the growth trajectory of the TSX’s tech superstar has been superb in the last eight years. From a market cap of US$2.05 billion in 2015, it grew 4,798% to $100.4 billion in 2023. 1,000% growth in 10 years should catapult Shopify to $1 trillion by 2034.
Shopify is trending again following the 26% revenue growth in 2023 to US$7.06 versus 2022. The full-year net income was US$132 million compared to the US$3.47 million net loss a year ago. In the fourth quarter (Q4), net income reached US$657 million versus US$623 million net loss in Q4 2022.
Moreover, it was the third consecutive quarter that revenue grew by more 20%. “It was a phenomenal year for Shopify,” said Harley Finkelstein, the company’s president. Notably, Shopify is the e-commerce platform of 45 of North America’s top 1,000 retailers, and 35% more merchants outside the region use its platform.
Finklestein added that the US$441 million revenue from offline sources, including offline subscriptions and point-of-sale hardware, was more than five times in 2019. One growth driver that Finklestein can’t avoid mentioning is artificial intelligence. He said Shopify launched artificial intelligence-powered tools to increase productivity and streamline administrative tasks.
Regarding stock performance, Shopify’s 119% return in 2023 lifted the TSX. At $105.97 per share today, the trailing one-year price return is 85%.
Dark horses
Constellation Software ( TSX:CSU ) could be the second Canadian high-growth stock to hit $1 trillion market cap in a decade or more after Shopify. As of March 13, 2024, the market cap is $79.93 billion. Performance-wise, it has better returns than Shopify in 3.01 years at +127.68 versus -25.53%. However, the share price is higher ($3,772.19).
The diversified software company caters to select clients in the public and private sectors in over 100 countries. In 2023, revenue, net income, and free cash flow increased 27%, 10%, and 36% year over year to US$8.4 billion, US$565 million, and US$1.2 billion, respectively. Unlike Shopify, Constellation Software has been highly profitable in the last four years.
Alimentation Couche-Tard ( TSX:ATD ) might have a slim chance of hitting $1 trillion, but it’s not inconceivable. The global footprint of this $80 billion convenience store is growing with ongoing acquisitions. From an investment standpoint, this consumer staple stock is rock solid. At $83.08 per share, the overall return in 10.01% years is 521.9%.
Mean feat
A $1 trillion market cap is a feat, but it is not impossible for Shopify or maybe Constellation Software and Alimentation Couche-Tard in 10 years or more.
The post 3 High-Growth Stocks That Could Be Worth $1 Trillion in 10 Years appeared first on The Motley Fool Canada .
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard and Shopify. The Motley Fool recommends Alphabet, Amazon, Apple, Constellation Software, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy .
2024