The disruptive nature and intense popularity of cryptocurrencies have contributed to several sharp rallies in the valuation of investments like Bitcoin. Yet that volatility cuts both ways, as the recent slump in Bitcoin's pricing demonstrates.
Investors looking for steadier returns might consider buying stocks instead. And the good news is, at least in the case of iRobot (NASDAQ:IRBT), Twilio (NYSE:TWLO), and Teledoc (NYSE:TDOC), you can still expose yourself to disruptive technologies while benefiting from the more predictable growth that stocks provide.
An investment that doesn't suck
Demitri Kalogeropoulos (iRobot): If you're interested in Bitcoin, chances are, you aren't afraid of a little price volatility. You likely have a healthy appreciation for transformative technology trends, too.
Those characteristics would serve you well with an iRobot investment. The robotic cleaning device specialist's stock has swung wildly over the past year (with more slumps than rallies) as investors try to guess how well its earnings power will hold up when rivals flood the industry. The best-case scenario is that iRobot manages to hold some semblance of its current 60% share a decade from now. A more pessimistic reading is that sales growth trends and profit margins both worsen as customers increasingly opt for cheap competition.
The recent launch of its Braava line of mopping robots represents a good test of iRobot's competitive strengths. If, like management believes, the company's brand, technical expertise, and sales penetration give it a durable advantage over peers, then iRobot should be able to extend its reach beyond the vacuuming niche that it dominates today with the Roomba. I'm sympathetic to that argument, and I also think that, with sales up 30% in the most recent quarter and gross profitability over 50% of sales, iRobot has plenty of flexibility to defend against rivals.
Twilio is on a tear
Steve Symington (Twilio): You may not have heard of Twilio, but if its latest quarterly report is any indication, a fast-growing number of customers can't get enough of the company's varied cloud-communications tools.
To be sure, shares of Twilio popped nearly 28% in the month of May after the company told investors that its customer base grew by nearly 33% to 53,985. But revenue climbed even more quickly, up 48% year over year to $129 million, as Twilio continued to expand its business with existing customers.
I should note that Twilio hasn't achieved sustained profitability yet. But that's not uncommon in the tech world for a company investing to expand its reach, drive top-line growth, and take market share in these early stages. On the former, the company notably launched a new fully programmable cloud contact center platform, Twilio Flex -- the industry's first fully programmable cloud contact center platform -- in March.
With Twilio shares still trading below their lofty post-IPO highs, and as more customers inevitably discover Twilio's growing product portfolio, I think the stock has plenty of room to run from here.
Another appealing disruptor
Jeremy Bowman (Teladoc): Bitcoin appealed to investors partly because of its ability to disrupt banking and payments. Another sector of the economy that is overdue for disruption is healthcare. Healthcare expenses have steadily outgrown the overall U.S. economy over the last generation, and that sector now makes up one sixth of the American economy. What company has an answer for rising insurance premiums and other medical expenses? Cue Teladoc, the nation's leading telehealth provider.
Teladoc provides virtual access to high-quality healthcare through video-conferencing and other such tools that help control costs and increase access to medical care. It's by far the largest telehealth provider in the country, with 75% market share, and it continues to growth both organically and through acquisitions, strengthening its competitive advantage.
In its most recent quarter, organic revenue increased 47%, while total revenue jumped 109% to $89.6 million thanks to its acquisition of Best Doctors last year. The company is currently operating at a loss, but considering the growth opportunity available and the generally high profit margins in the healthcare sector, that should change over time.
Teladoc estimates its total addressable market at $29 billion, yet the company's revenue is only projected to reach $350 million to $360 million this year, meaning it has tapped barely 1% of that market. That opportunity should only expand as video-conferencing and diagnostic technology improves and as healthcare costs continue to increase. The stock has nearly doubled in the last year, and more gains should be in store as growth ramps up.