As a long-term investor, it's always a good idea to look ahead by a few years. A particular company may be doing well today. But it's important to consider potential earnings down the road -- and that should give us an idea about whether the stock has what it takes to soar.
I always examine projects in the pipeline, the lasting power of today's revenue drivers, and industry forecasts. And these points may help us identify stocks that could turn $10,000 into $50,000 in only three years. Here are three candidates poised for this kind of explosive growth.
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1. Novavax
Novavax (NVAX 10.37%) is waiting for the U.S. to authorize its coronavirus vaccine. The news may come any day now. Meanwhile, more than 35 countries worldwide have authorized the product. And Novavax forecasts revenue this year in the range of $4 billion to $5 billion. That's a pretty big deal for a biotech company's very first commercialized product.
But that's not all. The company has already launched a phase 1/2 trial of its combination flu/coronavirus vaccine candidate. It expects to generate data from the trial next month. This potential product could ensure a high revenue level into the long term. Experts say the coronavirus will stick around. And a vaccine that protects against this virus and the flu could win big.
Novavax's shares are dirt cheap right now. They trade at only 3.5 times forward earnings estimates. And the shares trade about $120 below Wall Street's average share price forecast. Once this dynamic biotech company starts reporting billion-dollar revenue, the stock could take off.
2. Exelixis
Exelixis' (EXEL 0.62%) cabozantinib franchise could make it a superstar in tomorrow's world of oncology treatment. The company has already started generating revenue from treatments based on the compound. For example, it sells Cabometyx to treat renal cell carcinoma, hepatocellular carcinoma, and thyroid cancer. The cabozantinib business reached a huge milestone for the full year 2021: It generated $1.08 billion in U.S. net product revenues.
But Exelixis' growth is just starting. The company is testing cabozantinib in dozens of clinical trials in 14 different oncology categories. Seven of those trials are in phase 3. And the company is working on more than 10 early stage programs. In fact, one of this year's goals is to advance as many as five candidates from the early stage programs into preclinical testing. The company also expects "multiple" pivotal clinical trial reports from the cabozantinib program.
Exelixis shares have started to gain some momentum. They've climbed about 14% so far this year. But they still remain inexpensive. The stock trades for about 17 times forward earnings estimates -- down from more than 30 a year ago.
3. Figs
Figs (FIGS -2.26%), a maker of fashionable and comfortable medical scrubs, went public last May. The stock soared from its initial public offering price of $22 to about $50 in two months. Since, however, share performance has disappointed. The stock finished last year down more than 8%.
Now, here's the good news: This lackluster performance may signal a buying opportunity. That's because Figs hasn't disappointed when it comes to revenue growth. The company increased revenue 60% last year to a record $420 million. That's compared to the year-earlier period.
But here are the metrics that I like best -- because they indicate growth of the customer base and customer loyalty. Figs' active customers increased 46% to 1.9 million. Net revenues per active customer climbed 11%. And average order value grew 12%. This shows that Figs has been able to win over medical workers -- and they keep coming back and spending more. Figs forecasts revenue for this year that represents a year-over-year increase of at least 30%.
What's next for Figs? International expansion. The company currently ships to Canada, Australia, and the U.K. But it plans on boosting its presence in these markets and expanding into new ones. And Figs aims for revenue of more than $1 billion by 2025. If Figs can do it, shares of this young company may skyrocket.
