Thinking of adding some growth stocks to your portfolio? My favorites are ones that are flourishing now but also have plenty of solid growth prospects on the horizon.
These stocks usually won't give you the regular income of dividends. But they do offer potential for big stock market gains as they increase revenue -- and in some cases, profit.
I've chosen two healthcare stocks below with unstoppable growth when it comes to their sales and businesses. The shares soared during part of the pandemic but have declined quite a bit from their highs. Over the long term, though, these companies' unstoppable growth should lead to unstoppable share-price growth, too.
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1. Moderna
Moderna (MRNA 1.69%) has been generating billions of dollars in revenue and profit from its coronavirus vaccine, and this year shouldn't be any different. The company predicts $21 billion in coronavirus-vaccine revenue, according to orders received so far. That's even higher than last-year's vaccine revenue of $18.5 billion.
Of course, coronavirus-vaccine revenue may decline at some point. Once the pandemic shifts to endemic, fewer people may opt for vaccination. But it's very likely vaccine revenue still will remain at blockbuster levels.
Moderna is working on strain-specific booster candidates and even a combined coronavirus/flu shot. These more effective and/or more convenient options could convince a fair share of the population to go for a vaccine every year. For instance, about half of the U.S. population went for a flu shot last year. We may see that same population opt for regular coronavirus vaccination, too.
But here's what makes Moderna a great long-term choice. The company's coronavirus vaccine showed that Moderna's mRNA technology works in humans. But this company isn't only about its coronavirus program. Moderna has 31 active programs in development, and 19 are in clinical trials.
These programs span a variety of disease areas. Moderna even has two non-coronavirus programs in phase 3 studies -- vaccine candidates for cytomegalovirus and respiratory syncytial virus. So if all goes well, Moderna won't have to uniquely depend on its coronavirus program for long.
Moderna shares surged 1,200% over the past two years, but this year, they're down 32%. And that means they're trading at about 6.2 times forward earnings. This looks like a good entry point for a stock with a blockbuster product and a solid pipeline.
2. Teladoc Health
The pandemic offered Teladoc Health's (TDOC -2.40%) business a boost. People flocked to its online medical visits, versus traditional in-office visits. But here are two points that make me confident about Teladoc beyond the pandemic.
First, Teladoc already was growing revenue and medical visits prior to the health crisis. In fact, in 2019, they rose 32% and 57%, respectively. And second, Teladoc's revenue and visits continue to gain, even in today's stages of the pandemic -- when people have returned to their regular routines.
The general outlook for telemedicine is positive. At a compound annual growth rate of more than 25%, the global market is expected to reach about $396 billion by 2027, according to Fortune Business Insights. This supports Teladoc's optimism for its own business.
Last year, Teladoc generated $2 billion in revenue. The company aims to generate more than $4 billion by the 2024 fiscal year. Teladoc plans on doing this by increasing members and revenue per member. So far, it's demonstrated that it can increase both.
So what's been bringing down shares of this growth stock? Investors have worried about competition. They've also worried about the fact that Teladoc isn't yet profitable. But Teladoc has offered us clues that should lift some of those concerns.
The company has managed to stay ahead of rivals. In the recent quarter, the net loss narrowed from that of the previous year. It's important to keep in mind that Teladoc's investment in growth -- such as its acquisitions -- has weighed on earnings.
Now let's turn to the shares, which are down 17% so far this year. That leaves Teladoc trading at only 5.8 times sales. That's near its lowest by this measure since 2016.
Like Moderna, Teladoc stock may not soar again overnight. But this company has all of the elements in place to favor unstoppable returns over the long term.
