Buy low, sell high. It takes money to make money. If you don't have a lot of cash, these adages could convince you not to invest right now with stock market valuations at a premium.
However, there are still stocks that have tremendous growth potential. And you don't need a huge amount of money to buy them. If you've got $3,000, here are three growth stocks to buy that could skyrocket.
COVID-19 opened the door for many individuals and businesses to rethink how they work. This seems likely to accelerate the already growing increase of freelancing. Few companies are as well-positioned to profit from this trend as Fiverr (FVRR -3.15%).
Fiverr's online platform matches freelancers with buyers of digital services. The company charges a 5.5% service fee to buyers and takes one-fifth of the transaction amount charged by the freelancer.
This business model has worked really well for Fiverr. The company's revenue has soared more than 260% over the past five years. Fiverr delivered exceptionally strong third-quarter results with revenue jumping 42% year over year.
Even better, Fiverr still has a massive growth opportunity ahead. The company estimates that its addressable market stands at close to $115 billion annually. Fiverr currently claims only a fraction of a percent of this market. This stock could easily be a five-bagger or more by the end of the decade.
Every time you do anything on the internet, it creates more data. And that data has to be stored somewhere. Increasingly more of the data is stored in the cloud. MongoDB (MDB 1.66%) offers what is arguably the best cloud-based database platform around.
Sales for that platform -- Atlas -- skyrocketed 83% year over year in the second quarter. MongoDB continues to roll out new features that attract more customers. The company's CEO, Dev Ittycheria, wasn't exaggerating when he said in September, "It is becoming increasingly clear that the fastest and most compelling way to build modern applications is to use MongoDB."
The main knock against MongoDB is that its shares are expensive, trading at nearly 50 times sales. By comparison, none of the so-called FAANG stocks have price-to-sales multiples above 11, with most of them in the single digits.
MongoDB has much better growth prospects than the FAANG stocks, though. The cloud database market is projected to increase by a compound annual growth rate of 14.8% through 2028. But MongoDB is growing much faster than its rivals with no end in sight to its opportunities.
For many Americans, their pets are a part of their family. But veterinary costs continue to rise. That's where Trupanion (TRUP 2.64%) offers great value with its medical insurance for cats and dogs.
Trupanion ranks as the leader in the pet medical insurance market. It had over 1.1 million enrolled pets as of Sept. 30, 2021. The company delivered 40% year-over-year revenue growth in the third quarter.
Probably the biggest competitive advantage for Trupanion is its relationships with veterinarians. It's the only company that provides software that allows veterinarians to receive payment for services within minutes after checkout.
Trupanion has solid near-term growth drivers, especially with Aflac offering its pet medical insurance to employers in 2022. Its long-term growth opportunity is even greater. Only 1% and 2% of pets in the U.S. and Canada, respectively, are covered by insurance. Trupanion should be a big winner as it penetrates more of this market.