How much money does it take to start investing in stocks? There is no answer to that question that will satisfy everyone. But even with a relatively modest sum, such as $500, acquiring shares of companies with excellent prospects is more than possible.
So, for those who have that much to spare -- funds that they aren't saving for an emergency -- let's look at two excellent companies whose shares can be bought for much less than $500: Veeva Systems (VEEV 0.91%) and Match Group (MTCH 0.63%).
1. Veeva Systems
Among the dozens of companies that offer cloud-based services, Veeva Systems stands out due to its hyper-focus on providing cloud solutions catering to life science companies. There are good reasons why Veeva chose to focus on this market. First, it is highly capital-intensive. Second, life science companies are heavily regulated. Failing to follow the strict guidelines set forth by authorities can have severe financial consequences.
Catering to these demands explains why Veeva Systems has been successful, as evidenced by its serving many of the largest pharmaceutical and biotech companies. Veeva's more than 1,000-client list includes Bristol Myers Squibb, Eli Lilly, Novartis, and Moderna.
Veeva's revenue continues to grow, although more slowly recently. In its latest period, the first quarter of its fiscal 2024, ended April 30, the company's revenue increased by 4% year over year to $526.3 million. Here's how that compares to previous years:
VEEV Revenue (Quarterly YoY Growth) data by YCharts
Veeva Systems has the challenging economic conditions of the past year to blame for its slower growth. And with increasing expenses, its bottom line is also declining. The company's adjusted earnings per share of $0.91 was lower than the $0.99 reported in the year-ago period.
Despite these struggles, Veeva Systems expects its sales growth to bounce back. For its full fiscal 2024 (ending Jan. 31, 2024), it expects revenue to come in between $2.36 billion and $2.37 billion. At the midpoint, that would represent a year-over-year jump of almost 10%. For 2025, Veeva Systems' low-end guidance of $2.8 billion would imply revenue growth of roughly 18% compared to the midpoint projection for 2024.
More importantly, Veeva Systems still has plenty of whitespace to exploit. The company estimates a total addressable market of more than $13 billion. Veeva seems well-positioned to deliver solid financial results for a while. At the stock's current price of about $195, investors with $500 can acquire two shares of the company. Doing so would be an excellent move for long-term investors.
2. Match Group
Match Group is the worldwide leader in online dating. The company boasts a portfolio of dating websites and apps. Some of Match's platforms have lost momentum lately, including the most important one, Tinder. In the first quarter, the company's total revenue declined by 1% year over year to $787 million. Tinder's direct revenue remained flat compared to last year's Q1, while the app lost about 175,000 net paying subscribers.
Match Group's total payers dropped by 3% year over year to 15.9 million. The challenging economic conditions -- including the decrease in ad spending -- explain part of Match Group's poor recent results. However, the company's new CEO, Bernard Kim, has also emphasized since settling into his new role last year that Tinder has failed to capitalize on key monetization opportunities.
The company is currently focused on reinvigorating Tinder, most notably by engaging in a marketing campaign whose goal is to change the perception of the app in the U.S. and the U.K. Management wants potential and existing users to know that Tinder is for more than short-term relationships. According to the company, this initiative is already bearing fruit. This is evidenced by the number of downloads the app has recorded in Q1, especially within the demographic of women between 18 and 24.
Tinder benefits from solid name recognition and the flywheel effect, whereby the value of its platform increases its use, a powerful competitive advantage. That, combined with Match Group's marketing efforts and the eventual economic rebound, should be enough to help it return to growth soon.
Furthermore, there is still an exciting long-term opportunity in online dating, especially in Asia. The largest continent by population is largely an untapped market when it comes to online dating. Match Group is, of course, looking to cash in here. It recently appointed Sam Ahn as the Chief Innovation Officer of Match Group Asia.
Ahn is the now-former CEO of Hyperconnect, a Korea-based social media company that Match Group acquired in 2021. Hyperconnect owns two apps that allow users to meet friends across language barriers.
In my view, Match Group stands to remain the leader in online dating and take advantage of the opportunities available worldwide, which should lead to much improved financial results and stock market performances. With a share price of just under $45 as of this writing, $500 is good for 11 shares of the company.
