Hunting for stocks to add to your basket so that you can kick off 2022 on a high note? If so, you've come to the right place. We'll look at two very different stocks -- a biotech giant and a red-hot travel stock.
These companies both have strong track records of growth and a variety of catalysts to drive future growth even as we head into an uncertain and potentially rocky year.
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1. Vertex Pharmaceuticals
For those who aren't familiar with Vertex Pharmaceuticals (VRTX +1.27%), the large-cap stock is the singular leader in the global cystic fibrosis (CF) therapeutics market -- a market on track to hit a valuation of nearly $13 billion by the year 2030. The company currently has four approved products. All are approved to treat CF and are also the only cystic fibrosis transmembrane conductance regulator (CFTR) modulators that have yet made it to market. Unlike other types of therapeutics designed to treat the inherited disorder, CFTR modulators specifically address the issues with the CFTR protein that cause the disease.
Vertex Pharmaceuticals has several other CF therapeutics enrolled in late-stage development. In addition, the company has a slew of other non-CF drugs it's studying to treat conditions including Type 1 diabetes and Duchenne muscular dystrophy.
Shares of the stock have popped by more than 15% over the past month following a strong third-quarter report and positive results from a phase 2 study of VX-147, a drug candidate targeting a rare disorder called APOL1-mediated kidney disease. This jump is a welcome recovery for investors, as the stock had dipped more than 30% earlier in 2021 following scrapped trials for two separate candidates to treat the rare liver and lung disorder alpha-1 antitrypsin deficiency (AATD).
Vertex also continues to strengthen its balance sheet. In the most recent quarter, its total product revenues rose 29% year over year, while its net income and operating income popped by 28% and 57%, respectively, from the year-ago period. The company also closed the most recent quarter with roughly $7 billion in cash, cash equivalents, and marketable securities on its balance sheet.
With Vertex's leadership in the CF drug space, promising pipeline, and rock-solid financials, the stock could easily jump skyward over the next year. Now looks like a great time to take a second look at this stock while it's still trading at around 27 times trailing earnings.
2. Airbnb
The travel industry as a whole may be recovering from its pandemic woes at a slow, painful crawl, but not Airbnb (ABNB +2.71%). In fact, the company's most recent quarter was full of records on multiple fronts. Airbnb reported more revenue than it ever has in the history of the company, and its net income also hit a record high. Its third-quarter revenue of $2.2 billion was up 70% year over year and 36% from the same quarter in 2019. Simultaneously, its net income of $834 million was up 213% from two years ago and 280% from one year ago.
Not only are more people traveling again, but they're using Airbnb for a variety of purposes, and in some cases, for different reasons than the average traveler did before the pandemic. And with so many companies embracing remote and hybrid work environments, travel isn't something that people need to reserve for only two weeks of the year like they often did prior to the pandemic.
In Airbnb's third-quarter earnings report, management noted:
The increased popularity of long-term stays are turning traveling into living. Long-term stays of 28 days or more remained our fastest-growing category by trip length and accounted for 20% of gross nights booked in Q3 2021, up from 14% in Q3 2019. Long-term stays represent a broad set of use cases -- including extended leisure travel, relocation, temporary housing, student housing, and many others.
Meanwhile, shares of Airbnb have surged by double digits over the past week alone. This signals that investors are increasingly recognizing that Airbnb can keep capitalizing on the broad catalysts driving its business growth even as we enter an uncertain year, with COVID-19 cases surging and travel restrictions uncertain. As we head into 2022, Airbnb is a compelling choice for investors to consider scooping up shares of, before it pops even higher.
