Most investors won't get rich in the stock market overnight. The good news is, as a long-term investor, you don't need to implement complicated strategies or investing games to build a portfolio that stands the test of time.
By letting a pattern of regularly buying and adding to wonderful companies become your habit in both bear and bull environments, you participate in both the peaks and valleys of market cycles without undermining your long-term investing strategy.
On that note, let's take a look at two fantastic buy-and-hold growth stocks that can enrich your portfolio returns many times over in the years to come.
1. Airbnb
The travel industry has dealt with its fair share of hurdles over the last few years, and it could be in for more challenges ahead, particularly if the macro environment officially veers into a recession. Airbnb (ABNB 0.75%) has managed to buck many of the trends impacting the broader travel industry. Despite the fact shares are still down roughly 45% over the past 12 months, this sell-off traces its roots back to broad investor sentiment around growth stocks rather than specific issues with the company itself.
If anything, Airbnb's recovery has left most of the wider travel industry in the dust. As many growth businesses are struggling to retain headway in the current environment, the company continues to report quarter after quarter of strong growth. Even if this was to slow down in the near term in the event of a recession, Airbnb has built a solid foundation upon which it can launch itself into future, sustained business returns.
While global travel spending is slowing as consumers fear more economic pitfalls ahead, a huge catalyst behind Airbnb's continued expansion is tied to the fact the platform caters to a wide variety of consumers and travelers. Certainly, people use Airbnb to book short-term or vacation rentals, but more and more customers are turning to the platform to locate homes they can stay in for a much longer duration. In fact, approximately one-fifth of all gross bookings processed on Airbnb's platform are derived from long-term stays, which are bookings of 28 days or longer.
Airbnb's revenue jumped 29% year over year to $2.9 billion in the most recent quarter, while its net income rose 46% from the year-ago period to $1.2 billion. The third quarter was its most profitable to date. The company has proven time and again its platform remains well positioned to grow.
From business travelers and tourists to digital nomads, Airbnb's platform has something for everyone. It's this versatility, not to mention the vital stream of income that Airbnb provides to its more than four million hosts globally, that can fuel the consistent demand the company needs to grow in the near term and for many years to come.
2. Shopify
Shopify (SHOP 1.11%) isn't the the investor favorite that it was in the earlier days of the pandemic, but overlooking the stock due to its near-term challenges could be a mistake in the long run. Shares of Shopify are trading down by about 74% from the beginning of this year, and this has occurred for a few different reasons.
Investors have understandably been concerned about the company's turn into GAAP unprofitability in recent quarters. And as investors shy away from growth-oriented businesses with less capital flowing into the markets and macroeconomic conditions presenting elevated risk, this has also put severe downward pressure on the stock.
As always, it's important to look at the reason behind a stock's movements before you determine whether or not it's a wise addition to your portfolio. As for Shopify's recent losses, this goes back broadly to its continual pattern of aggressively investing in its business growth and the heavy use of stock-based compensation. In the first nine months of 2022 alone, Shopify spent $932 million on sales and marketing, compared to $626 million in the same period last year.
It's also worth noting that Shopify's results have been affected by its portfolio of equity investments. The company has large stakes in heavily beaten-down tech stocks Affirm and Global-e Online, both of which it also has long-standing partnerships with. And just like individual investors have seen many equity investments decline over the last year, the same can be said of Shopify. Still, the company is making progress on a multitude of fronts. Shopify's addition of Deliverr to its fulfillment network earlier this year is key to enable its long-term growth, retain and expand its merchant network, and reduce exposure to the impact of future supply chain disruptions.
The platform remains a go-to for business owners around the world to do everything from launch a brand from scratch to seamlessly integrate an online store with a brick-and-mortar presence. In the first nine months of 2022, Shopify's top line jumped 20% year over year to $3.9 billion. Meanwhile, Shopify had $4.9 billion in cash and investments on its balance sheet at the end of the period.
While Shopify's spending to build out its business will weigh on its bottom line in the near term, this can also position it for continued growth and enable it to retain its competitiveness over the long term. This ultimately bodes well for investors who take a buy-and-hold approach to the stock.
