The broader market has been in rally mode over the last month, as investors start looking ahead to stores reopening and a potential recovery on the horizon. But no matter what happens with the economy this year, there are stocks out there that could significantly grow the value of your investment.
One growth stock that could double your money over the next five years is the low-code software provider Appian (APPN 2.72%). Two other promising stocks are leaders in the growing video game industry, Take-Two Interactive (TTWO 1.88%) and Glu Mobile (GLUU). Here's why you should consider buying these stocks today.
Investors should consider buying shares of Appian. This is a relatively small, fast-growing tech company, with a total market value of $4.1 billion. The stock has soared more than 300% since its IPO in 2017, as revenue more than doubled over the last three years.But this growth story is just getting started.
Investors are high on the company's leading low-code automation platform to help businesses create complex applications to manage new business lines, risk management and compliance, or drug development, just to name a few. Appian combines artificial intelligence and robotic process automation to help organizations create apps using a simple interface. The beauty of the platform is that it doesn't require much coding experience. This allows businesses to create apps with speed, which is important in a competitive business world.
Appian's advanced platform has allowed it to grow sales despite competition from large rivals like Microsoft. Revenue increased by 31% year over year in the first quarter, but management guided for a decrease in revenue of 7% to 8% for the second quarter due to lower professional services spending stemming from the COVID-19 crisis. However, cloud subscription revenue, which represents roughly a third of total revenue, is expected to be up 25% to 26% year over year.
Looking beyond the next quarter, the long-term market trend should fuel this growth stock higher. The market for low-code automation software is expected to increase nearly 10 times in size to reach $52 billion by 2024, according to a report by Prescient & Strategic Intelligence. Given the tailwind, Appian shares could easily double in value over the next five years, given that its trailing-12-month revenue was just $279 million.
Wall Street analysts currently expect video game maker Take-Two Interactive to grow earnings approximately 12% annualized over the next five years. But there's a good chance Take-Two will beat those estimates.
Take-Two just announced a huge quarter of growth, as players spent more time playing games with people practicing social distancing during the first quarter. Revenue and earnings increased by 16% and 21%, respectively, in fiscal 2020 (which ended in March). While fiscal 2021 will be a light year for new releases, management announced that it has dozens of new titles in development, which positions Take-Two for further growth over the long term.
One title that will surely see massive sales is the next installment of Grand Theft Auto. The current installment, Grand Theft Auto V, has sold 130 million units since releasing in 2013. Another catalyst for growth is the series of football gaming experiences set to launch starting next year in partnership with the NFL.
Take-Two is one of the leaders in a growing $148 billion industry. A deep pipeline of new games could easily lead to a doubling in the stock price over the next five years. The shares are currently trading at 30 times forward earnings estimates.
Another video game stock investors should consider is Glu Mobile, a leader in mobile games. With officially licensed content from Disney, Glu just released Disney Sorcerer's Arena to good reviews, as well as the latest installment in the Tap Sports Baseball series. Glu Mobile saw revenue increase 12% year over year in the first quarter, with Tap Sports Baseball posting the highest first-quarter bookings in company history.
The stock is up 241% over the last three years and up 48% year to date. With the addition of Disney Sorcerer's Arena and new upcoming titles in the pipeline, Glu Mobile should continue to maintain its momentum this year and capitalize on the fastest-growing market for mobile games.
Glu Mobile is operating in a $68 billion mobile-game market with just $422 million in trailing-12-month revenue. Analysts expect earnings to grow 15% annualized over the next five years, which could lead to a doubling in the stock price. The stock trades at 36 times forward earnings estimates, which is not cheap but is warranted given the long runway of growth making games for mobile devices.
Jumpstart your nest egg
If you've got some cash to invest and are looking for a few stocks to juice your returns, these three tech stocks could do the trick. All three companies are growing on a small revenue base and should outperform the market. Even better, there is a good chance these stocks will double the value of your investment within the next five years.