Beyond the stock split: 2 very strong growth stocks to buy now

Important points

  • Stock splits often create quite a bit of buzz, but they don’t change the value of the underlying company.

In early April I wrote an article expecting it Shopify It could be one of the following companies to split its stock. Four days later, the company announced a 1:10 stock split. Of course, I had no way of knowing that would happen. Most importantly, while I was making the Shopify purchase in my article, my thesis had nothing to do with a potential stock split.

A stock split can certainly excite investors. We’ve seen it several times this year. But it does not directly affect the company’s core value. That’s why you shouldn’t just consider a stock split when deciding where to invest your money. Metrics such as sales growth and market opportunity, for example, are more important.

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With that in mind, here are two super-growth stocks that are worth buying right now.

1. Coinbase: Gateway to the Cryptocurrency Economy

Coinbase Global (WKN: A2QP7J, -4.98%) is the best cryptocurrency broker for investors and financial institutions. The company is the largest crypto broker in the US and has continued to gain market share over the past year. However, Coinbase also offers solutions for archiving, storing, and spending cryptocurrency as well as developer infrastructure services via Coinbase Cloud. In short, the company is a gateway to the cryptocurrency economy.

Currently, Coinbase generates the bulk of its revenue from transaction fees, which are based on the price and quantity of crypto assets purchased or sold. In other words, Coinbase is highly dependent on trading volume, and volatility increased trading volume by 766% to $1.7 trillion in 2021. In contrast, revenue increased by 514% to $7.8 billion, and GAAP earnings rose by 936%. to $14.50 per diluted share.

Despite this phenomenal performance, Coinbase has barely scratched the surface of its full potential. The cryptocurrency market is currently worth about $2 trillion – that’s just a fraction of the $120 trillion global stock market and the $124 trillion global bond market. If the crypto market continues to grow, Coinbase will likely benefit from higher transaction fees in the future.

Additionally, subscription businesses and emerging services that generate revenue from enterprise cold storage and infrastructure services are likely to grow as investors embrace cryptocurrency.

Finally, in April 2022, Coinbase launched a beta version of the non-fungible tokens (NFT) market. Given the enthusiasm for NFTs, CEO Brian Armstrong said that Coinbase’s NFT market could be larger than the company’s cryptocurrency business.

If you believe in the future of the cryptocurrency economy, Coinbase is a great way to be a part of this trend. Even better, the stock is incredibly cheap, trading at four times sales and ten times earnings. For comparison: Certified Broker Charles Schwab – A company whose revenue grew 34% over the past year (compared to Coinbase’s growth of 514%) – is trading with 7x sales and 25x profits. To me, this means that the market has overlooked Coinbase’s long-term potential. This is why this high-growth stock is a real buy.

2. CrowdStrike: The Gold Standard in Cyber ​​Security

Crowd Strike Holdings (NYSE: A2PK2R, -3.11%) specializes in cyber security. Its suite of Software as a Service (SaaS) includes 22 different modules ranging from endpoint security and cloud workload protection to threat analytics and managed services. Most importantly, the company’s cloud architecture allows for security signals to be collected from across the protected hardware ecosystem. Using this information, CrowdStrike uses artificial intelligence to predict and prevent even the most complex hacking.

To this end, the company has built a solid reputation for detecting modern threats. Even better, CrowdStrike is recognized as a leader in multiple sectors in the cybersecurity industry. Forrester Research recently ranked CrowdStrike as a best-in-class solution for endpoint detection and response, and International Data Corp. CrowdStrike ranks as a leader in managed detection and response.

These awards have translated into outstanding financial results. CrowdStrike’s customer base has grown 65% over the past year to 16,325 and the average customer has spent 24% more. In contrast, revenue rose 66% last year to $1.5 billion, and free cash flow rose 51% to $442 million.

But investors have good reason to believe that rapid growth will continue. CrowdStrike recently added identity threat protection to its industry-leading managed security offering, Falcon Complete. This is important for two reasons.

First, nearly 80% of cyber attacks result from compromised credentials and no other company offers a fully managed identity service. Second, there are currently 3 million vacancies in the cybersecurity industry, a labor shortage that may have left many companies vulnerable to attack. Falcon Complete allows organizations to offload endpoint security, cloud workload protection, and identity threat protection for CrowdStrike’s team of experts.

Additionally, CrowdStrike has a clear competitive advantage in a market valued at $126 billion by 2025. That’s why this growth stock is worth buying now.

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Charles Schwab is an advertising partner for The Ascent, the Motley Fool Company. This article was written by Trevor Jennewine and published on on 4/26/2022. It has been translated so our German readers can join the discussion. Trevor Jennewine owns CrowdStrike Holdings, Inc. and Shopify. Motley Fool owns stock in Coinbase Global, Inc. and CrowdStrike Holdings, Inc. And Shopify recommends it. Motley Fool Charles Schwab recommends the following options: long January 2023 calls worth $1,140 on Shopify and short January 2023 calls worth $1,160 on Shopify.

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