Robinhood Markets hasn't been a great investment to own since going public last year. Down 60% and incurring losses north of $3.6 billion last year, investors don't need to look far to find safer and better growth stocks.
A couple of stocks that investors should look at instead include Maravai LifeSciences (MRVI -0.65%) and Airbnb (ABNB 1.17%). Both have better fundamentals and possess great growth potential.
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1. Maravai Sciences
Healthcare company Maravai Sciences is involved in the production of nucleic acid, which is used in mRNA vaccines and therapeutics. Last year, its sales came in at just under $800 million and soared 181%. It reported a net income of $182 million for an impressive profit margin of 23%. In 2022, Maravai projects that its revenue will be between $920 million and $960 million, representing a growth rate between 15% and 20%.
Over the longer term, the growth could continue. Analysts from Research and Markets project that the global mRNA vaccines and therapeutics market will grow at a compound annual rate of 13% until 2026.
Maravai has a big advantage over potential competitors -- it has experience working with some of the biggest names in the industry. Last year, Pfizer accounted for nearly one-quarter of its total revenue, while BioNTech represented just under 30% of sales. Those are increases from the previous year. Combined, those two businesses made up just under 31% of Maravai's revenue.
While it may be unnerving to see more than half of a company's revenue come from just two customers, both have done business with Maravai for some time now. Since they did even more business with the company this past year, that's a positive sign that things are going well. Plus, they are much safer customers to rely on than smaller, unprofitable companies would be.
In 12 months, Maravai's stock has risen by just 4% while the S&P 500 is up around 14%. It trades at a forward price-to-earnings (P/E) multiple of 20, which is more expensive than a multiple of 16 for the average stock in the Health Care Select Sector SPDR Fund. However, given its strong profit margin and potential in the mRNA market, it's not hard to argue that Maravai may be worth a bit of a premium. Unlike Robinhood, its business is already profitable, and it gives investors a much safer growth stock to hold in their portfolios.
2. Airbnb
Lodging company Airbnb isn't profitable yet, but it's showing some significant improvements. In 2021, it incurred a net loss of $352 million, less than 8% of the $4.6 billion loss reported a year earlier. And its bottom line was also better compared to 2019 when Airbnb's net loss totaled $674 million. Plus, the business has been experiencing strong growth. Airbnb posted sales of $6 billion last year, which rose 77% compared to 2020 and were up 25% from 2019's levels.
For the first quarter of 2022, Airbnb projects that its sales will be around $1.4 billion, slightly below the $1.5 billion it reported in its most recent period, which covered the last three months of 2021. But it's important to note that this forecast came amid the emergence of the omicron COVID-19 variant and rising case numbers, so the top line could potentially come in a bit higher.
Even if the first quarter isn't a strong one for Airbnb, the long-term outlook should be better right now, with many countries around the world learning to live with COVID as opposed to trying to eliminate it. Under that scenario, the business could have some exciting growth ahead as more people get back to traveling and vacationing.
Although its shares have been rallying of late, Airbnb's stock is still down 7% over the past year. But with minimal profitability, its forward P/E looks incredibly high at 111. That's still better than Robinhood, which probably won't post a profit anytime soon. And as Airbnb's sales rise amid a return to normal, its bottom line will improve, which should bring down that P/E multiple over time.
For investors expecting a post-pandemic recovery this year, Airbnb could be an ideal stock to own right now.
