2 Monster Growth Stocks That Turned $10,000 Into $100,000 in Less Than a Decade

Growth investors are always on the hunt for the next moonshots, the stocks that could generate life-changing wealth in a relatively short period of time. The Trade Desk (TTD -1.65%) and Paycom Software (PAYC -1.56%) certainly fit that mold. Both stocks have skyrocketed in recent years, growing so fast that either would have turned an initial investment of $10,000 into more than $100,000 in less than a decade.

Are these growth stocks still worth buying today?

The Trade Desk: 1,900% return in six years

The Trade Desk saw its share price jump more than 1,900% over the last six years. In fact, an initial investment of $10,000 in September 2016 would now be worth $204,000. Can that trend continue?

The Trade Desk is an advertising technology company. Its buy-side platform helps marketers plan, measure, and optimize targeted ad campaigns across digital channels. While ad giant Alphabet has drawn antitrust scrutiny for its opaque tactics, The Trade Desk has earned a reputation for transparency due to its content neutrality. Its platform is independent, meaning the company does not own any web properties and therefore has no incentive to steer ad buyers toward any particular inventory. The same cannot be said about Alphabet, which owns Google Search and YouTube.

Thanks to its reputation for transparency, The Trade Desk has won partners in key advertising verticals, including Walmart in shopper marketing and Walt Disney in connected TV advertising. Better yet, The Trade Desk is actually the most popular independent buy-side platform in the industry, and that scale is a significant advantage. For instance, its platform sees over 13 million ad opportunities every second, and each campaign generates more data, making its artificial intelligence engine a little better at driving positive outcomes for marketers.

The Trade Desk once again delivered solid financial results over the past year. Revenue rose 34% to $1.4 billion and free cash flow soared 70% to $476 million. But the company has only scratched the surface of its potential. Global ad spend is rapidly approaching a $1 trillion addressable market, and The Trade Desk has established itself as the top independent platform for ad buyers, meaning it is well positioned to capitalize on that opportunity.

Currently, shares trade a reasonable 21.1 times sales, and that valuation looks cheap compared to its three-year average of 30.1 times sales. With that in mind, this growth stock is indeed worth buying today, though investors shouldn't expect tenfold returns over the next six years.

Paycom Software: 1,600% return in eight years

Paycom's share price soared more than 1,600% over the last eight years. That means an initial investment of $10,000 in September 2014 would now be worth over $173,000. But what does the future hold?

Paycom specializes in human capital management (HCM). Its cloud platform includes software for workforce scheduling, training, and payroll, as well as solutions for benefits administration, compliance, and other human resources tasks. Those HCM tools help businesses manage the entire employee lifecycle -- hiring through retirement -- from a single platform. And that gives Paycom an edge, as management believes most businesses currently meet their HCM needs with a patchwork of point solutions.

Recently, Paycom continued to differentiate itself with the launch of Beti (Better Employee Transaction Interface), the first self-service payroll software in the HCM industry. Beti effectively automates payroll by requiring employees to review and approve their paychecks prior to processing. That reduces the burden on HR personnel, which helps businesses operate more efficiently. Thanks to Beti, Fast Company recognized Paycom as one of the world's most innovative companies in 2022. It was the only HR and payroll technology company to receive that honor.

Not surprisingly, Paycom is growing at a steady clip. Revenue jumped 30% to $1.2 billion over the past year, while free cash flow climbed 30% to $211 million. And investors have good reason to believe that momentum will continue. Management estimates that it has captured just 5% of its total addressable market, but its comprehensive cloud HCM platform and innovations like Beti should drive growth in the coming years.

Currently, shares trade at a pricey 83.5 times earnings, but that figure is a bargain compared to its three-year average of 114 times earnings. More importantly, Paycom is a high-quality business that warrants a premium valuation. With that in mind, investors should consider buying a few shares of this growth stock, though a 1,600% return over the next eight years is highly unlikely.