The stock market has been an incredibly volatile place to invest over the last year, and it's highly possible that the choppy market waters could persist in the near future. Even so, great businesses with compelling growth stories continue to prove their staying power and generate impressive financial growth, even as share prices remain in flux.
If you're looking for two stocks that could increase an initial investment by five times or more by the start of the next decade, here are two names to consider adding to your buy basket in the near future.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -0.50%) is on a mission to disrupt the multi-billion-dollar rare disease drug market, having built a rock-solid foundation of revenue growth and profits from its existing portfolio of cystic fibrosis (CF) drugs. While the company counts just four drugs in its current portfolio of approved products, all of which treat CF, these are the only products that have been commercialized to date that treat the genetic ailment's root cause.
With tens of thousands of CF patients who could benefit from its current portfolio of drugs still unreached, and another several thousand who can't take Vertex's approved ones (it already has a candidate in the works for this patient population), it's safe to say that the company has a long runway of growth ahead from this batch of products alone. However, its current pipeline includes a range of promising candidates.
One is exa-cel, a therapy it co-developed with CRISPR Therapeutics under an agreement where Vertex took on 60% of the research and development costs in return for 60% of the profits, should the Food and Drug Administration (FDA) approve the drug. The companies have completed regulatory submissions for exa-cel in the U.K., Europe, and the U.S. If approved, exa-cel would not only be the first CRISPR therapy ever commercialized, but could be a onetime functional cure for two types of rare blood disorders: Sickle cell disease and transfusion-dependent beta thalassemia.
Another Vertex pipeline candidate in phase 3 testing that will potentially reach commercialization next is its acute pain therapy, VX-548. Notably, this therapy is not opioid-based, so it doesn't carry the same risk of addiction or potential side effects like liver damage that many traditional acute pain treatments on the market currently do. Acute pain is one of the most frequently reported health concerns, and is behind upwards of 120 million emergency room visits in the U.S. alone every single year. This is another multi-billion-dollar market opportunity that could present significant growth potential for the company over the next five to 10 years.
Investors with an appetite for steady-growth healthcare stocks may want to take a second look at Vertex Pharmaceuticals, as this looks like a company with abundant runway left to explore in the near term and over the long haul.
2. Pinterest
Pinterest (PINS -0.30%) has carved a unique niche for itself in the world of tech stocks with its image-focused site that draws scores of users in for free and monetizes them by selling advertising space to brands of all sizes across a range of industries.
The company saw its monthly active user count skyrocket during the earlier days of the pandemic, which made sense with so many people staying at home for months on end with little to do outside of professional activities than scroll the internet. It also followed than when the world reopened, user growth would moderate.
Moreover, in an environment where companies across all industries are contending with rising costs and scaling back on ad spend, this was inevitably going to affect Pinterest's business. Still, the issues that Pinterest has had to contend with in the past quarters weren't tied to any underlying deficiencies with the business itself. Rather, unfavorable year-over-year comparisons and a difficult economic environment have been key factors here.
The fourth quarter of 2022 saw Pinterest report $877 million in revenue and $17 million in net income, while monthly active users totaled 450 million, a 4% increase on a year-over-year basis. Moreover, average revenue per user rose 1% in the final quarter of 2022, and was up 10% in the full year compared to 2021. Looking back over the past three years, Pinterest has seen its top line grow by about 66%. And that user count of 450 million at the end of 2022 represented an increase of about 35% from Pinterest's user count at the end of 2019.
The image-centric design of Pinterest's platform is an ideal location for users to scroll for minutes to hours for the idea, inspiration, or product of their choice. This platform design also blends seamlessly with a variety of image and video advertisements that can help to not only inspire users but induce them to purchase, without even realizing they were shopping to begin with. In fact, over 30% of all revenue on Pinterest is generated from video content. Forward-thinking investors with cash to invest right now may want to take advantage of this buying opportunity.
