In a market full of stocks that have been cut in half, there are a few that stand out as potential great buys. While I'm not sure when the recovery will occur, I'm optimistic the market will be higher three to five years in the future.
With that long-term mindset, investors can approach the market with the idea of doubling their money more quickly. Two stocks I think could double your money in that timeframe are CrowdStrike (CRWD 1.09%) and dLocal (DLO -0.40%). Here's why.
Cybercrime will be even more widespread in three to five years, and the need to protect against these attacks will have significantly risen. CrowdStrike provides some of the best protection money can buy, and it does it through its cloud-based platform powered by artificial intelligence (AI). What separates CrowdStrike from other cybersecurity providers is how it utilizes the trillions of data points it generates each week to continuously evolve and improve the program.
CrowdStrike's offering is so robust that third-party Forrester Research found the software has a payback of less than three months and a three-year return on investment of 403%.
News of this value proposition has spread fast, as CrowdStrike's customer base rose 57% year over year (YOY) to 17,945. For comparison, CrowdStrike only had 1,242 customers five years ago. Furthermore, included among its customers are 15 of the top 20 U.S. banks and more than half of the Fortune 500.
That's a pretty impressive customer base.
While it has captured a lot of customers, there is still a lot of opportunity available. During its first quarter (ended April 30), annual recurring revenue (ARR) rose 61% YOY to $1.9 billion. This revenue level suggests CrowdStrike has captured about 3.3% of its current $58 billion estimated total addressable market. However, CrowdStrike believes its total addressable market will be around $126 billion by 2025. Therefore, if it can maintain a 3.3% market share, its ARR would rise to $4.16 billion.
By more than doubling its revenue in three years, CrowdStrike's stock will be in a prime position to keep pace. With the stock down more than 40% from its all-time high, it's a great candidate for investors looking for growth.
While CrowdStrike's growth looks impressive (and it is), dLocal's is much more rapid.
dLocal allows its customers to process transactions in local currency in many emerging markets like Cameroon or Malaysia. In total, dLocal powers transactions in 37 countries. Because many of these countries don't have a traditional credit or banking system established, dLocal works with each location individually to provide the best possible payment methods.
With its Payins and Payouts products, dLocal has teamed up with many top names in commerce, including Nike and Amazon. Its Payins plugin allows consumers to utilize local payment methods -- like bank transfers or unique credit card companies -- on e-commerce platforms. Payouts allows retailers to collaborate with local distributors and reimburse them through local currency.
To set up this infrastructure in each country would be expensive and inefficient. Instead, big retail companies can easily employ dLocal's services to capture a small but growing section of the emerging country market.
dLocal's financials are about as solid as an investor can ask for. During Q1, dLocal's revenue rose 117% YOY to $87 million while turning a $26.2 million profit. Usually, most fast-growing companies aren't profitable, but dLocal bucks that trend.
Additionally, dLocal onboarded more than 10 "significant merchants" during Q1. While this is a bit vague, it shows more merchants are signing up to use dLocal's product.
With dLocal growing as rapidly as it is, it won't take much for the stock to double. Factor in that the stock is down more than 60% from its all-time high, and it doesn't even need to set a new record to double.
I'm confident dLocal and CrowdStrike will provide investors with great returns over the next few years. However, I have no idea what the market will do in the short term. No one can control what the market does, but by buying businesses with strong opportunities for growth, investors can give themselves the best chance to beat the market over three to five years.