The stock market has been volatile over the past year. But even amid the mayhem, great businesses continue to deliver results. That underlying strong business showing can lay the groundwork for equally strong positive share price movement as the economy recovers.
If you have the cash available that you don't need for bills, to pay off short-term debts, or to bolster an emergency fund, and you can afford to leave that cash invested for at least three to five years, there are several fantastic companies with stocks begging to be bought.
Let's take a look at two of them.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 0.85%) has a solid track record of steady revenue growth and profitability thanks to its portfolio of top-selling cystic fibrosis medicines. Its flagship product, Trikafta, is approved to treat more than 90% of the cystic fibrosis patient population in the U.S., and the continued expansion of indications for its portfolio of medicines over the years extended the availability of these products to younger and younger groups of patients.
Vertex Pharmaceuticals also bears the distinction of being the only company with cystic fibrosis medicines on the market that target the underlying cause of the disease. That advantage, along with the fact that its products give patients an improved quality of life (and in many cases, longer lives), continues to supercharge its growth. Even with the company's impressive footprint, management estimates that a significant number of cystic fibrosis patients who could benefit from its approved portfolio of medicines aren't yet taking them: 20,000, in fact.
Beyond the untapped market opportunity here, the cystic fibrosis patient population is growing. In the 2022 earnings call, CFO Stuart Arbuckle said the following:
Last month, we raised our estimate for the number of patients with cystic fibrosis in the U.S., Europe, Australia, and Canada to 88,000, up from our previous estimate of 83,000. The growth in the CF population can be attributed to more patients coming forward to receive treatment, better data capture in patient registries, and perhaps most importantly, people with CF are living longer due to improvements in patient care and the availability of truly effective therapies.
Vertex Pharmaceuticals is also aggressively building out its pipeline beyond the multibillion-dollar cystic fibrosis treatment space as it looks to the potential of other lucrative and underpenetrated markets. For example, the company is in the process of putting forward regulatory submissions for exa-cel, a blood disorder therapy it co-developed with CRISPR Therapeutics. Not only could this product be approved in the coming months, but its approval would make it the first marketed therapy with the potential to provide a single-treatment functional cure for sickle cell disease and transfusion-dependent beta-thalassemia.
This is just the tip of the iceberg, as Vertex Pharmaceuticals also has a range of other promising products in development, including a candidate for cystic fibrosis patients who are unable to benefit from its current line of drugs, and a non-opioid treatment for acute pain. The potential for Vertex Pharmaceuticals is enormous, and investors who stay with this healthcare stock for the long haul can benefit from this impressive trajectory.
2. Airbnb
Airbnb (ABNB -0.58%) remains something of a safe harbor in a storm, a stand-out example of resilience against a volatile travel sector landscape. While it's true that consumers are still spending money on travel even as savings rates are down and inflation continues to gnaw away at spending power, Airbnb's continued growth trajectory would seem to indicate that a wide variety of catalysts beyond the traditional travel industry are driving its impressive results.
The company continues to see a robust recovery and growth in its cohort of short-term stays, a sign that consumers continue to shell out money on a wide variety of travel options even in a spending-constrained environment. However, long-term stays and stays of seven nights or more continue to witness strong levels of demand and growth. Case in point: Long-term stays -- bookings that are 28 days or longer -- were up to 21% of all nights booked on the platform as of the end of 2022.
And as for stays of at least seven nights, these comprised almost 50% of all bookings on Airbnb's platform as of the close of the year. Notably, Airbnb's cohort of nights booked for over one week in the final quarter of 2022 represented an increase of 40% compared to the same quarter in 2019.
While Airbnb's financial growth on a year-over-year basis remains impressive, its comparisons to pre-pandemic levels indicate that the notable revenue growth and profitability it's witnessing aren't just from a short-term travel recovery. Revenue totaled $8.4 billion in 2022, and it was the company's first full year of profitability, with earnings of $1.9 billion.
That revenue figure represented an increase of 40% from 2021, but it was up 75% from 2019. And that sizzling net income figure compares to net losses of $352 million in 2021 and $674 million in 2019. It's also worth noting that it isn't just guest demand that's soaring. Airbnb also saw tremendous growth in the number of people wanting to host on the platform, particularly in a tumultuous economic landscape where the ability to earn income from sources beyond one's primary job has become increasingly attractive. The company ended 2022 with a record 6.6 million active listings, a 16% increase on a year-over-year basis.
These consumer and host-driven tailwinds can persist in a wide range of economic environments. Even if a recession hurts bookings in the short term, durable travel trends for everyone from vacationers to digital nomads can continue to drive Airbnb's growth story and enrich investors in the process over the coming decade and beyond.
