I'm not a fan of timing the market. I'm naturally also not happy when stocks tank. However, every investor probably has a list of investments that got away. The path to redemption starts with second chances, and a sharp market correction or even a market crash is a new time to make up for lost time.
DocuSign (DOCU -0.02%) and Freshpet (FRPT 0.89%) are two stocks that I've been cheering on from the sidelines for too long. I hope to change that in the near future, and I wouldn't hesitate to pull the trigger the next time the shares fall out of favor. I know they have long-term potential despite any hiccups.
An obvious winner during the pandemic disruption is DocuSign. Contracts still need to be signed in the new normal, and nobody's even close to DocuSign in dominating the e-signatures market. Revenue growth has accelerated in its last three fiscal quarters, culminating in a 54% year-over-year pop in its latest report.
DocuSign has beaten Wall Street profit targets by triple digits in three of the past five quarters. And the clincher is that two of those beats happened just before the pandemic made in-person contract and document signings a thing of the past. Yes, DocuSign was an obvious winner even before the COVID-19 crisis.
DocuSign will close out its fiscal 2021 when it serves up its fiscal fourth-quarter results in two weeks. With its tendency to "beat and raise" every time it steps up to the earnings stage -- even in the two reports where it didn't have triple-digit beats it still topped earnings forecasts by 20% and more recently 69% -- the only question for me is whether I should try to establish my long overdue position in DocuSign before its March 11 report even if I don't get a market pullback.
Another stock that I regret not buying earlier is Freshpet. The provider of premium refrigerated food has a unique moat, and I can't say that I didn't see its success coming. The stock has soared 168% since I recommended it in one of our newsletter services in mid-December 2019. The humanization-of-pets trend was finding us spoiling our furry friends by treating them more like members of the family, and that was just fine for Freshpet with its high-end fresh food for dogs and cats.
Freshpet sells its products through leading grocery stores and mass market retailers through branded fridges. It makes sense. Grocers aren't going to want to stock pet food in the same coolers as people food. Freshpet stepped up with the ideal solutions, providing retailers with stand-alone refrigerators, and that pretty much shuts everybody else out because a grocery store isn't just going to start stocking other fridges for rival offerings. It has more than 22,000 fridges out in the wild right now. It's been struggling to keep up with demand, and that's a good problem to have.
The pandemic simply kicked things up a notch for Freshpet with pet adoptions soaring. Starting puppies and kittens off early on Freshpet will mean more than a decade of repeat business in most cases. A year ago Freshpet was hoping to have a feeding dish in 8 million homes by 2025. Now it has revised that goal to penetration of 11 million homes. With revenue accelerating for the fourth consecutive year -- up nearly 30% in 2020 -- I can't believe I haven't bought into a story that I've been talking about for a long time.