Everyone wants to see their investments double in value. Seeing a 100% gain in your stock portfolio is more than thrilling; it's a motivator that keeps you investing. And in the long run, that's how real success happens.
Needless to say, 2022 hasn't been a great year for 100% gainers. The major market indexes, like the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average are set to finish 2022 in the red.
However, the stock market won't stay down forever. When it inevitably recovers, some stocks could soar. Here are two that can turn $500,000 into $1 million by 2025.
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1. Adobe
My first pick to double by 2025 is Adobe (ADBE -0.84%). This software company sits at the intersection of creativity and productivity, which is essential in today's digital economy.
More than ever before, organizations must create digital materials that are illuminating, specialized, and captivating. Adobe's suite of products, including, Acrobat, Photoshop, Creative Cloud, and many others, helps organizations achieve exactly that.
In its most recent quarter (the three months ending on Dec. 1, 2022), Adobe's revenue jumped to $4.5 billion, up 10% from a year earlier. Earnings per share (EPS) came in slightly ahead of analyst estimates at $3.60, despite currency headwinds due to the strong U.S. dollar.
Recent results are proof that Adobe's business isn't drying up, as many had feared. Nevertheless, shares are down 40% year to date.
However, if the company can continue to deliver solid results over the next two years, a double isn't out of the question. Simply look at what Adobe stock did from December 2019 to December 2021. Shares moved higher by more than 100% over those two years, as sales surged from $11.2 billion to $15.8 billion.
Looking ahead, Wall Street thinks Adobe is a prime candidate to lead the market higher. Of the 31 analysts who cover the stock, 25 rate Adobe as a "strong buy" or "buy," with none rating it worse than a "hold." The average price target is $373, almost 10% above its current price.
If the company continues to deliver solid earnings reports, like the one from last week, I think shares can double by 2025.
2. Lululemon
My second stock capable of doubling in value over the next two years is Lululemon (LULU -0.41%). And part of the reason why is that Lululemon has pulled this off before.
If you had invested $500,000 in Lululemon (LULU -0.41%) in December 2019, that amount would have grown to $993,000 by December 2021 -- just shy of a 100% return in precisely two years.
Lululemon is an athleticwear retailer. The company sells men's and women's clothing, shoes, and accessories via more than 600 physical stores and its website.
In its most recent quarter (the three months ending on Oct. 29, 2022), Lululemon recorded about $1.9 billion of revenue, up 28% year over year. Moreover, earnings per share grew to $2, up from $1.44 a year earlier.
Lululemon's recent results show that the company is executing on its so-called "Power of 3 x2" growth plan. This is management's strategy to double its annual revenue to $12.5 billion by 2026 by doubling its menswear and digital sales, along with quadrupling its international sales.
Analysts think Lululemon can grow sales to $8 billion in 2023 and $9.2 billion in 2024, representing sales growth of 28% and 15%, respectively.
However, I think the analysts are underestimating Lululemon's growth in 2024. Shares should skyrocket if the company continues to deliver 20% or higher sales growth over the next two years. And that's why I think Lululemon shares can double by 2025.
