It's easy to follow the herd. It can be far more lucrative to carve your own path. Disruptors often fail, but when they succeed they birth bar-raising business models and wealth-altering results for early believers.
If you're willing to risk the volatility that comes with thinking differently, there are several publicly traded companies that are turning heads out there. Airbnb (ABNB 0.16%), Sleep Number (SNBR 31.58%), and Bumble (BMBL +0.90%) are three disruptors I love right now.
NASDAQ: ABNB
Key Data Points
Airbnb
I have nothing against hotel chains. They offer easy access, scalable cleaning, dining, and maintenance solutions, as well as a great way to use credit card reward points. However, they can also be small, stuffy, and noisy. Sometimes you want something a little more unique and a lot more spacious, and that's where property rentals come in.
Airbnb obviously didn't reinvent this game when the founders set up an air mattress for convention guests needing a place to stay in San Francisco. Longtime vacation property buffs had been using VRBO, HomeAway, and other platforms for years. However, Airbnb pushed the offering mainstream. It has created a cottage industry where enterprising opportunity seekers are snapping up properties to convert into vacation rentals as well as a growing fan base of travelers who prefer the local color that stodgy hoteliers can't provide.
Image source: Getty Images.
Airbnb delivered $63.2 billion in gross bookings last year, 42% ahead of 2021 on a currency-adjusted basis. There are 6.6 million active listings on the app, up just 16% from a year ago, but that's great news for property owners if bookings are growing even faster than availability.
With a market cap of $75 billion, Airbnb isn't sneaking up on anyone in the hospitality industry. Analysts see revenue growth slowing to the mid-teens at this point. However, Airbnb has achieved the scale where it finally turned profitable for the first time last year. Bottom-line growth should be explosive at this point. Airbnb is trading for a stiff 43 times trailing earnings but a more reasonable multiple of 30 if you look out to next year. The lodging industry will never be the same, and Airbnb is the platform that made it happen.
NASDAQ: SNBR
Key Data Points
Sleep Number
If you're looking for a more value-priced -- and currently out-of-favor -- disruptor, don't sleep on Sleep Number. It's the company behind a unique approach to bedding, offering air-chambered mattresses with adjustable firmness settings. It's been carving its own path for decades, but a couple of years ago it raised the bar by introducing the first smart bed.
The Sleep Number 360 aims to help improve your sleep quality. It monitors your slumber, adjusting your firmness settings if it senses restlessness. Higher-end models can gently elevate someone when they're snoring or make the bed warmer or colder based on tossing and turning.
Fundamentally speaking, Sleep Number is in a lull. Net sales have stalled, rising a mere 1% in its latest quarter and slightly lower in three of its five previous reports. A chip shortage was the initial culprit -- these are high-tech beds, after all -- but now the problem is negative demand. With the economy iffy and the real estate market icy there isn't a lot of interest in high-end sleeping solutions. Sleep Number is targeting a profit between $1.25 and $2 a share in 2023 with net sales flat to down mid single digits. The stock is trading at 17 times the midpoint of that depressed guidance, but just 11 times next year's profit target.
NASDAQ: BMBL
Key Data Points
Bumble
My third and final attempt at playing disruptor matchmaker for you is a disruptive matchmaker. Online dating existed long before Bumble emerged. In fact, Bumble creator and CEO Whitney Wolfe Herd was part of Tinder's founding team that would eventually be absorbed by market leader Match Group.
Bumble is built differently. Herd had problems with the male-dominated culture at Tinder and how that trickled down to the way that dating apps work. Bumble stands out by only allowing women to initiate communication when it's a male-female proposed match.
Bumble is growing faster than Match Group. It has posted at least four consecutive years of at least 18% revenue growth. Match Group grew its top line by less than 7% last year. It offered encouraging guidance last month. As the fastest growing player among dating app stocks, Bumble is a disruptor waiting to fling Cupid's arrow into your portfolio.
