Last year, the pandemic highlighted the importance of a digital-first strategy, driving changes across multiple industries. In fact, the International Data Corporpoation estimates that enterprise spending on digital transformation will total $6.8 trillion between 2020 and 2023.

With that in mind, companies like MongoDB (NASDAQ:MDB) and Teladoc Health (NYSE:TDOC) should benefit greatly in the years ahead, and both look like smart long-term investments. Here's why.

Multiple physicians communicating with telemedicine platform.

Image source: Getty Images

1. MongoDB

Databases sit at the core of software applications, providing a place where information can be stored, organized, and accessed. Traditionally, these systems have used a relational model, where structured data is stored in rows and columns. However, many of today's applications (e.g. streaming video, social media, email) don't generate data that fits neatly into row and columns.

This has created a need for a more modern database, and MongoDB has capitalized on that opportunity. Its platform uses a document model, which allows developers to quickly store large chunks of unstructured data. In other words, they don't have to waste time reformatting the data, and that ultimately increases productivity and efficiency. In fact, compared to traditional solutions, MongoDB helps clients build applications up to five times faster, while cutting costs by 70%.

As a result, its document model has become a developer favorite, as evidenced by MongoDB's rank as the world's most popular non-relational database. That advantage has been a strong growth driver for the company.

Metric

Q1 2019 (TTM)

Q1 2022 (TTM)

CAGR

Revenue

$306.3 million

$641.7 million

28%

Data source: Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate. Note: Q1 2022 ended April 30, 2021.

Much of this growth has been powered by MongoDB Atlas, the company's database-as-a-service offering. With this product, clients get all of the benefits of MongoDB, but avoid the hassle of managing the underlying infrastructure. During the most recent quarter, Atlas revenue surged 73%, and now accounts for more than half of MongoDB's total sales. Investors should look for this momentum to continue.

Currently, the IDC values the database market at $73 billion. And that figure should only get bigger as more enterprises look to modernize their application data infrastructure. That leaves plenty of room for MongoDB to grow its business.

2. Teladoc Health

Teladoc is the world's largest provider of virtual healthcare solutions. It contracts with employers, health plans, and health systems, generating revenue primarily through subscription access fees. Teladoc's platform provides a spectrum of services, ranging from prevention and wellness, to acute care and mental health, to the management of chronic and complex conditions.

Last year, the coronavirus pandemic was a significant catalyst for the company, as it accelerated the adoption of telemedicine. Paid U.S. memberships soared 41% to 51.8 million, and Teladoc's platform enabled 10.6 million visits, up 156% from 2019.

That strength continued into the first quarter of 2021, with virtual visits climbing 56% to 3.2 million. However, U.S. paid memberships dropped slightly on a sequential basis, falling to 51.5 million. Even so, Teladoc delivered 151% revenue growth, and management raised full-year guidance to $2.0 billion at the high end.

Looking further back, Teladoc's top-line performance has been consistently strong.

Metric

Q1 2018 (TTM)

Q1 2021 (TTM)

CAGR

Revenue

$280.0 million

$1.4 billion

70%

Data source: Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Going forward, Teladoc is well positioned to grow its business. Virtual healthcare offers a much faster and more convenient solution for patients. For instance, the median response time between a member's request and a telehealth consultation was less than 10 minutes in 2020. Traditional office visits could never offer that turnaround time.

Moreover, management puts Teladoc's market opportunity at $250 billion in the U.S. alone. That figure may seem high, but total U.S. healthcare spending hit $3.8 trillion in 2019, or nearly 18% of gross domestic product, according to the Centers for Medicare and Medicaid Services. In other words, Teladoc is disrupting a massive market, and given its comprehensive offering, I think this stock will be a long-term winner.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.