2 safe stocks to buy and hold for the long term

There are all kinds of short-lived trends that make money for some companies, but turn out to be fads that are not worth the hard-earned money of investors, at least not those with a long-term mindset. Corporations that can deliver strong long-term returns tend to be leaders in industries that won’t decline in prominence or disappear anytime soon. That describes it Fiverr (FVRR 1.12%) and Airbnb (ABNB 0.38%) good While these two stocks have not performed strongly in the stock market this year, both could produce huge results over five years or more.

1. Fiverr

Fiverr is a platform that allows freelancers to advertise their services and attract companies that want to hire them. Building a website from scratch is a long and complicated process, which makes Fiverr a better option for many freelancers. Businesses benefit from having a vast library of freelancers with samples of their work and client reviews all in one convenient place.

Everyone wins, including Fiverr. The company’s revenue hasn’t grown as fast as it once did, but the technology leader has been able to turn a profit by aggressively cutting costs.

In the second quarter, Fiverr’s revenue of $94.7 million was up 6% year over year. It turned a net income per share of $0.01 in the second quarter of 2023 into one of $0.08 this time.

Fiverr also announced the acquisition of AutoDS, a company specializing in drop-shipping. The two entities did not disclose financial details of the transaction. The move, however, helps Fiverr get a new source of recurring subscription revenue in a market that was worth $226 billion in 2022, according to some estimates.

It also gives the company another growth opportunity as drop shipping is on a growth path. The company’s core business will also benefit from a significant tailwind — the rise of the gig economy. Workers enjoy the flexibility it offers. Others need an additional source of income. Regardless of the reason, analysts predict that the gig economy will continue to expand.

Fiverr is also taking advantage of the increased adoption of artificial intelligence as companies turn to its platform to hire subject matter experts. The company estimates a total addressable market of $247 billion — that’s without adding AutoDS to its business.

Although Fiverr’s stock has fallen significantly over the past three years, it remains a great stock to buy and hold for a while.

2. Airbnb

Airbnb is a leading provider of accommodation and experiences for travelers. The company’s platform has more than 5 million hosts in dozens of countries around the world.

Although Airbnb’s business was in the dumps during the pandemic, it has probably come back stronger than ever. Revenues have grown at a good level and Airbnb is consistently profitable.

In the first quarter, Airbnb’s top line grew 18% year-over-year to $2.1 billion. Its net income of $264 million was up 126% from the year-ago period — it was the company’s most profitable quarter ever. Other key metrics have moved in the right direction, including nights and experiences booked and free cash flow.

What does Airbnb’s long-term outlook look like? The company should do well for the foreseeable future, at least as long as people still like to travel.

Consider one of Airbnb’s growth opportunities: long-term stays. Stays of three months or longer were up 25% year-over-year for the company in the first quarter. This is partly due to the gig economy, as many freelancers like to travel while on the road.

For those on the road for three months or more, it’s often preferable to stay in a private residence because it offers advantages such as privacy and amenities that might be hard to find in a hotel.

AI is another potential growth driver for Airbnb. The company is working to create an AI-powered concierge. In November, it acquired the GAI company GamePlanner.AI for this purpose. If successful in its AI initiatives, Airbnb could reduce costs and improve efficiency and margins in the long run.

It is also worth noting that Airbnb’s business benefits from the network effect, as more hosts on its platform will attract more guests and vice versa. This strong competitive advantage should allow Airbnb to remain a leader in its field and provide patient investors with market races.