While not all cryptocurrencies are created equal, and while some may make sense for a well-diversified investment portfolio, there remains a world of opportunity beyond this volatile space for individuals looking to build wealth over the long term. If you're looking to invest more money in stocks this month, you don't have to go far to find wonderful companies on solid courses to realize sustained growth over a period of years.
Here are three such companies to consider adding to your basket of stocks right now.
1. Airbnb
Airbnb (ABNB 0.19%) continues to prove that its business model is stickier than ever, both to travelers and hosts. The company's 2022 financial results bore that point out in spades, with the company hitting fresh records on a number of fronts.
Revenue for the year totaled $8.4 billion, up 40% from 2021 and 75% from 2019, the year before the pandemic. Last year was Airbnb's very first of annual profitability, during which time the company raked in profits in the amount of $2 billion. The company is also flush with cash. Airbnb generated free cash flow of $3.4 billion in 2022, up 49% from the prior year and an incredible 3,072% from the full year 2019.
NASDAQ: ABNB
Key Data Points
While short-term stays, urban travel, and cross-border travel are all seeing prolonged recoveries and driving growth, Airbnb continues to witness notable growth in its cohort of long-term stays of 28 days or more.
In other words, Airbnb isn't just deriving its growth from vacationers and other short-term travelers. The digital age of work and all the opportunities that have been afforded to workers continue to change the dynamics of the travel industry. This long-term-stay segment now comprises 21% of all bookings on the platform, compared to 13% to 16% before the pandemic.
More people are looking to host on Airbnb, and more guests are deciding to turn to hosting as a means of replacing or earning additional income. In fact, in the final three months of 2022, a whopping 36% of new hosts on Airbnb had actually stayed in a rental hosted on the platform.
Airbnb is in a fantastic position to continue to benefit from a range of travel trends. Even if a recession hits, the forward-looking trajectory for its industry and the ways Airbnb continues to capitalize on the needs of both travelers and hosts, plus its rock-solid financial foundation, create a compelling buying proposition for a multiyear investment.
2. Etsy
Etsy (ETSY 1.37%) is one of many e-commerce stocks that has taken a hit amid the ongoing market volatility. Amid a backdrop of fluctuating consumer spending, a deceleration of growth from pandemic levels, and a foray back into unprofitability in 2022, some investors seem unsure exactly how to approach this top growth stock and whether its buying proposition will hold true.
I would maintain that it does, and I'd like to take each of the aforementioned concerns one by one.
Yes, consumer spending is fluctuating right now, and if an actual recession occurs, any company that doesn't sell essential products and services is going to take more of a hit. However, this is still a relatively brief headwind in the context of a buy-and-hold position of several years or more.
At the same time, the fact that Etsy's platform and family of brands revolve around items that are unique, pre-owned, vintage, or handmade may be increasingly attractive to a spending-constrained consumer.
NYSE: ETSY
Key Data Points
Regarding the deceleration of growth from pre-pandemic levels, it was only natural that there would be normalization from the supercharged period of online shopping that many consumers leaned into when millions were trapped at home.
And compared to pre-pandemic levels, growth is still accelerating rapidly. Case in point: As of the end of 2022, Etsy's new buyers and gross merchandise sales per active buyer represented increases of 60% and 27% from the comparable periods in 2019, while total gross merchandise sales were up 145% on a three-year clip.
Finally, regarding Etsy's recent unprofitability. For one thing, the net losses Etsy has recorded in recent quarters haven't been due to operational issues. These largely stemmed from noncash impairment charges, essentially because it overpaid for Elo7 and Depop in 2021 (as many companies did for acquisition targets in the height of the pandemic). The final three months of the year saw the company return to profitability after this series of paper losses, in the amount of $110 million.
Etsy remains a leader in its respective niche of e-commerce, and operates in a multitrillion-dollar addressable market that is still underpenetrated. That gives it abundant room to grow over the next decade, and investors who stay along for the ride could reap the rewards.
3. Chewy
Chewy (CHWY 3.04%) is a well-known pet e-commerce giant featuring an assortment of brands and private-label products. From dog pens to cat trees to horse feed, Chewy's online store and autoship program made it easy to get the items that animal owners need.
Chewy's autoship program is continuing to see adoption at such a rate that as of the third quarter of 2022, more than 73% of all sales were generated from this segment.
However, supplies for house pets and farm animals barely even scratch the surface of the vast selection of offerings that Chewy offers its customers. Over the last few years, the company made a series of key launches, including multiple pet health insurance plans, a pet telehealth service, and its pet pharmacy, which is set up to handle both ordinary prescriptions as well as orders for compounded medications.
NYSE: CHWY
Key Data Points
One of the most integral aspects of any e-commerce company's success is a smooth fulfillment system. And in a difficult economic environment where operating costs are high and consumers want the items they order quicker than ever, Chewy is capitalizing on this need by growing its network of automated fulfillment centers. It plans to open two more in the coming months, and as of the third quarter, roughly 30% of all packages sent out were processed through these centers, compared to just 10% in the year-ago period.
This level of automation not only reduces overhead costs to Chewy, but also helps shorten wait times for customers, creating a circular effect that benefits both the top and bottom lines. The third quarter of 2022 saw the company generate $2.6 billion in net sales while net income came in at $2.3 million.
Operating in a fast-growing industry that generally faces consistent demand (some estimates show global pet spending is on track to reach more than $236 billion by 2030), Chewy looks like an intriguing choice to add to a well-diversified portfolio.
