Teladoc Health (TDOC -3.10%) and Shopify (SHOP 0.19%) are two growth stocks that have lined shareholders' pockets over the past five years. The stocks have returned 1,290% and 3,660% during that period, far outperforming the S&P 500's 102% gain. 

The firms' rallies never seem to end, largely thanks to their ability to sustain their momentum with constant innovation. Here's why each is an ideal long-term hold

Woman on her laptop.

Image source: Getty Images.

1. Shopify

Shopify's edge lies in its ability to integrate third-party apps with its platform to help vendors grow their revenue. These programs include order fulfillment, upsell features, importing products from a reseller, customer service pop-ups, syndication to social media, notifications for abandoned carts, and more. Over 6,600 apps exist on the company's platform to extend product capabilities.

Shopify's services are designed to help sellers succeed from start to finish. In the beginning, Shopify charges as little as $29 per month for entrepreneurs to set up shop and takes care of payment solutions for them. During first-quarter 2021, it also facilitated $308.6 million in loans to them, which increased by 90% over Q1 2020 in volume. Those vendors with wildly profitable stores also have the option to cash out. Shopify provides a medium for owners to buy and sell their stores, while handling most of the paperwork and monetary transfers.

There are over 1.7 million sellers in Shopify's ecosystem. Its sales grew by 110% year over year to $988.6 million in Q1 2021. At the same time, the firm's net income improved by over 10-fold from Q1 2020 to $254 million.

What I like the most about Shopify is its ability to scale on a capital-light model. While it was expanding, it accumulated $7.87 billion in cash and just $909 million in convertible debt. Right now, Shopify has over 107 million users, and 24 million of them are regulars. Its gross merchandise volume stood at $37.3 billion per quarter and grew by 114% from last year.

The company stock is trading at 49 times revenue. That seems very expensive, but Shopify still has a lot of room to grow. It holds the No. 2 spot, or 8.6%, of market share in the e-commerce sector, just behind Amazon's (AMZN -0.16%) 39% stake. The run-up in its stock is far from over as it is closing in on the top position.

2. Teladoc Health 

Teladoc is looking to become a one-stop integrated platform for all digital healthcare needs. Once registered, patients can seek consultation with one of Teladoc's physicians anytime, anywhere. It offers all kinds of services, including primary care, behavioral therapy, mental health, and telepharmacy. Recently, it expanded its platform into chronic health management and already has 658,000 members under its banner.

During Q1 2021, its revenue and operating income less non-cash items (EBITDA) increased by 151% and 429% year over year, to $453.7 million and $56.6 million, respectively. It has the most room to grow in its international segment. Teladoc operates in over 170 countries, but its non-U.S. sales only account for 8.3% of total revenue at the moment.

It's clear that the COVID-19 pandemic wasn't just a one-time boost to the company's bottom line. Total visits on Teladoc's platform surpassed 3.2 million in the quarter, up 56% from last year. For 2021, it aims to increase its total sales to $2 billion and its EBITDA to $265 million. Due to its highly scalable business model, solid growth, and quality of service, it's still an outstanding stock to buy at 14 times revenue.