2 growth stocks that could double by 2030

To double your money by 2030, you should look for companies that consistently show double-digit revenue growth. Assuming you buy those stocks at reasonable valuations, the stock price will usually follow the growth of the business. This is why investing in growth stocks can be the best way to build long-term wealth.

One area that is generating reasonably priced growth stocks right now is the $6 trillion global e-commerce market. Here are two fast-growing leaders that could double your investment in the next five years.

1. Shopify

Shopify (STORE -0.24%) the stock has been an incredibly rewarding investment for those lucky enough to get in early after the company’s initial public offering (IPO) in 2015. The stock has returned 2,800%, but the company still has plenty of room to keep growing and offers high returns for years to come.

Shopify gives businesses the tools to open and manage an online storefront. It generates revenue through subscriptions to its platform, but most of its revenue is generated by selling additional services to merchants, including payment processing, loans and shipping.

The massive e-commerce market is a huge opportunity, as the company’s growth indicates. Second-quarter revenue rose 25 percent year-over-year after excluding the impact of the sale of its logistics business, and management guided revenue to grow in the low to mid-20s range in the third quarter. Keep in mind that Shopify has been around for over a decade and is still growing at these high rates.

The company has begun to focus more on helping merchants expand internationally, which could keep its momentum going for a few more years. Cross-border sales make up just 14% of its gross merchandise volume (GMV), but international GMV is growing faster than North America, up 27% year-over-year in Q2. This trend shows how products like Shopify Markets strengthen a company’s competitive advantage by being a one-stop shop for merchants.

The stock’s price-to-sales (P/S) ratio of 12.5 is at the lower end of its previous 10-year trading range. With Wall Street analysts projecting that the company will grow its revenue at an annual rate of 21% over the next few years, it should maintain a growth rate of at least 15% through the end of the decade. That’s enough to double the stock’s value, assuming it continues to trade around its historical average P/S multiple.

2. Coupang

Coupang (CPNG 4.17%) is Korea’s leading e-commerce store. It has doubled its revenue since 2020. It tanked right after its IPO a few years ago, and the stock is now reasonably priced relative to its growth potential. Coupang should deliver market-beating returns.

Adjusted second-quarter revenue rose 23% year-over-year, excluding the impact of the acquisition of luxury goods retailer Farfetch. The stock has fallen 54% since its 2021 IPO, but has climbed 16% over the past year as the business has shown the potential to improve margins and profitability.

Coupang generated $1.5 billion in free cash flow on $27 billion in revenue last year — a respectable margin for an online retail company. The company uses non-retail services, such as food delivery through its WOW membership program, to build customer loyalty and increase margins. This will sound very familiar Amazon Prime customers, which speaks to Coupang’s opportunity.

Investors may be underestimating the potential for growth in services and the impact on Coupang’s profitability. Gross margin improved two percentage points last quarter, excluding the impact of Farfetch, driven by supply chain efficiencies and increased margin-enhancing service offerings. The company is also leveraging investments in AI automation to increase productivity.

Meanwhile, the stock trades at a modest P/S ratio of 1.48, which is below Amazon’s early growth P/S multiple. Analysts expect Coupang to grow the top line by more than 16% annually over the next few years.

With Coupang at the start of expansion in Taiwan, revenue should continue to grow at double-digit rates through the end of the decade. The stock only needs to continue trading at its current low P/S multiple for shareholders to double their money by 2030.