If there's been one standout group of stocks since the end of the Great Recession in 2009, it's growth stocks. The combination of historically low lending rates and the Federal Reserve's ongoing quantitative-easing measures have made cheap capital abundant for borrowing purposes.
But for some supercharged companies, their growth is just beginning. According to Wall Street's consensus estimate, the following four growth stocks are expected to see their sales climb by 306% to as much as 658% by 2024.
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Redfin: Implied sales growth of 306% by 2024
One of the most profound growth stories over the next four years should be technology-driven real estate company Redfin (RDFN +0.00%). Last year, the company managed $886 million in revenue. But according to Wall Street, it'll be knocking on the door of $3.6 billion by the time 2024 rolls around.
There's no denying that Redfin has benefited from historically low mortgage rates. But eventually, mortgage rates will rise, and a seemingly spoiled group of prospective buyers will have to cope with rates of 4% or even 5% for 30-year mortgages. Yet even with higher mortgage rates, Redfin looks poised to succeed.
One of the bigger differentiating factors for the company are the cost savings it brings to the table. Traditional real estate companies charge 2.5% to 3% to represent a buyer or seller. Meanwhile, Redfin charges either 1% or 1.5% to act as an agent for its clients.
This up to 2 percentage-point difference might sound nominally small, but it can easily top $7,000 in cost savings for a seller when we're talking about median-priced existing home sales. As long as economic or pandemic worries persist, the savings Redfin provides should remain in focus.
Furthermore, Redfin provides personalization that traditional real estate firms don't offer. As an example, Redfin rolled out 3D and virtual tours during the pandemic to keep the hamster on the wheel, so to speak. It also offers its RedfinNow purchasing services in select cities around the country. This service buys homes from sellers in cash, which removes the hassles and haggling that typically accompanies the home-selling process.
With Redfin heavily reinvesting in its operations, it could be a couple of years before the company turns the corner to recurring profitability. However, sales growth won't demonstrably slow anytime soon.
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Trulieve Cannabis: Implied sales growth of 344% by 2024
U.S.-based marijuana stocks are another source of supercharged growth over the coming four years. Perhaps no cannabis stock will deliver more eye-popping nominal sales growth than multistate operator (MSO) Trulieve Cannabis (TCNNF 0.94%). Between 2020 and 2024, full-year sales are expected to climb from $521.5 million to about $2.32 billion.
To quickly get a big concern out of the way, federal legalization isn't necessary for pot stocks to thrive in the United States. We've witnessed 36 states legalize marijuana in some capacity, and the Justice Department is maintaining a hands-off approach. That's a recipe for high-quality MSOs to succeed.
What's made Trulieve such a unique company is its laser focus on the Florida market. Whereas most MSOs have been stretching themselves thin in an attempt to establish a presence in as many legalized states as possible, Trulieve has opened 100 dispensaries in the Sunshine State. Saturating the medical marijuana-legal Florida market has allowed the company to keep its marketing costs down while effectively building up its brands. It now controls about half the state's dried flower and oils share and has been profitable on a recurring basis for more than three years.
The next phase of growth for Trulieve will be inorganic. It recently closed an all-stock deal to acquire MSO Harvest Health & Recreation. While Harvest Health had a five-state focus, the allure of this acquisition is Harvest's leading position (15 dispensaries) in its home state of Arizona. The Grand Canyon State legalized recreational weed in November and commenced sales two months later. Trulieve could very well become a runaway leader in Arizona and show shareholders the green.
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Novavax: Implied sales growth of 658% by 2024
It's not surprising to find supercharged growth potential among biotech stocks. Going from non-recurring revenue to recurring sales following a first drug approval can lead to a huge percentage surge in sales.
That's what's expected to happen with Novavax (NVAX 1.47%). In 2020, the company recorded almost $476 million in full-year sales. But by 2024, Wall Street's consensus has Novavax pegged for a hair above $3.6 billion in revenue.
For the time being, Novavax is a clinical-stage company -- but that seems destined to change.
The company's leading vaccine candidate is NVX-CoV2373, a treatment for the coronavirus disease 2019 (COVID-19). This vaccine has been through two large-scale, late-stage studies that produced overall vaccine efficacy (VE) of 89.7% (in the U.K.) and 90.4% (in the U.S. and Mexico). While initial VE is just one aspect of the COVID-19 vaccine, Novavax offers a solution that appears to handily outpace Johnson & Johnson and AstraZeneca in initial VE. In other words, it could slide right in as the global No. 3 COVID-19 vaccine if granted emergency-use authorization.
Additionally, Novavax could set itself apart from the competition by producing combination vaccines, such as COVID-19 and influenza. The company's vaccine-development platform is designed in such a way that it can potentially beat other large drugmakers to market with combination vaccinations or variant-specific boosters.
Among COVID-19 stocks, Novavax remains the most intriguing, in my view.
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fuboTV: Implied sales growth of 582% by 2024
The fourth and final supercharged growth stock is streaming-television provider fuboTV (FUBO +0.00%). After the company delivered $261.5 million in full-year sales in 2020, Wall Street is expecting sales to increase to around $1.78 billion in 2024. That's a cool 582% improvement.
FuboTV is aiming to capitalize on consumers' distaste of traditional cable, satellite, and telcoTV. A report from NScreenMedia shows that over 21 million fewer households had one of these traditional content services in the first quarter of 2021, compared to the same quarter four years earlier. At the same time, the number of households without a traditional cable, satellite, or telcoTV has more than tripled between 2014 and Q1 2021. People are clearly dissatisfied with the lack of choice from traditional cable and satellite providers, and they're unhappy with the high service costs.
For fuboTV, it's all about appealing to consumers who want streamable, live sporting events. Although it offers news and entertainment content, too, the company's core customer, for the moment, is a sports fanatic who wants to cut their content costs. As of June, the company had 682,000 subscribers, which is more than double what it had last year, but still represents a very small figure.
The big question for fuboTV is what'll allow it to separate from the competition. The answer to that question might be sports betting. The company has recently been granted mobile sports-betting licenses in a handful of states, which could provide a tangible lure to the platform.
For now, fuboTV is losing money hand over fist as it attempts to build up its brand. But if it can find a truly differentiating factor in the streaming space, it could offer long-term appeal.
