In early April, I suggested in a blog post that Shopify might be one of the next firms to split its stock. Four days later, Shopify announced a 10-to-1 stock reduction. Of course, I had no idea that would happen. More significantly, while my article provided evidence for purchasing Shopify, my investment thesis was unrelated to a possible stock split.
Stock splits have the potential to entice investors. This happened several times in 2017. However, they do not immediately influence the underlying business’s value. As a result, while stock splits are important, it is best to consider them in conjunction with broader factors when determining where to put your money. Metrics like as revenue growth and market opportunity are far more significant than stock split information alone.
That’s why, in this section, I’ll introduce you to two highly promising growth stocks that you should consider buying right now.
1. Coinbase: The gateway to the cryptoeconomy
Coinbase Global (COIN -3.62%) is a cryptocurrency brokerage for retail investors and financial institutions that is best recognized for its services to traders and firms. In reality, Coinbase runs the largest virtual currency trading business in the United States, and last year it increased market share. However, Coinbase also offers storage, staking, and spending solutions as well as developer infrastructure services through Coinbase Cloud. In other words, the firm provides a means of entry into the cryptoeconomy.
Coinbase currently earns the bulk of its money through transaction fees, which are determined by the price and quantity of the cryptocurrency being bought or sold. To put it another way, Coinbase is heavily reliant on trading volume because volume exploded 766% to $1.7 trillion in 2021. As a result, revenue increased 514 percent to $7.8 billion and GAAP earnings climbed 936%.
Despite that amazing feat, Coinbase has barely scratched the surface of its vast potential. The crypto market is presently worth $2 trillion, which is a small fraction of the global equity market and the global bond market worth $120 trillion and $124 trillion respectively. Assuming the cryptocurrency market continues to develop, transaction fees will likely rise in the future.
Its budding subscription and services industry, which produces money through staking, institutional cold storage, and infrastructure services, should expand as investors become more excited about cryptocurrency.
Finally, in April 2022, Coinbase introduced a beta version of its non-fungible token (NFT) marketplace. CEO Brian Armstrong has stated that the Coinbase NFT marketplace might be larger than the cryptocurrency business because of the buzz surrounding NFTs.
2. CrowdStrike: The gold standard in cybersecurity
CrowdStrike Systems is a cybersecurity firm. Its software-as-a-service (SaaS) package contains 22 distinct components, ranging from end point security and cloud workload protection to threat intelligence and managed services. More significantly, CrowdStrike’s cloud native architecture allows it to collect security signals from across its protected device ecosystem and use artificial intelligence to forecast and prevent even the most sophisticated attacks.
To that end, the firm has established a reputation for being at the forefront of security innovation. It’s also been recognized as a leader in several sectors of the cybersecurity business. According to Forrester Research, CrowdStrike is the best-in-class solution for endpoint detection and response, and International Data Corp. rated CrowdStrike as a front-runner in managed detection and response.
The company has also seen substantial financial gains as a result of these accolades. Over the previous year, CrowdStrike expanded its customer base by 65 percent to 16,325, and customers spent 24% more on average. Revenue increased 66 percent to $1.5 billion last year, while free cash flow increased 51% to $442 million.
Investors have a strong basis for expecting supercharged development to continue. Last month, CrowdStrike included identity risk protection in its industry-leading managed security service, Falcon Complete. That’s significant for two reasons.
First, compromised credentials are the most common way that cyberattacks occur, and no other firm provides a fully managed identity service. Second, with 3 million unfilled jobs in cybersecurity, an industry labor scarcity that has probably left many businesses open to attack, it’s clear why Falcon Complete makes sense.
In a market valued at $126 billion by 2025, CrowdStrike has an unassailable competitive advantage. That is why this growth stock is worth buying right now.
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