Every investor wants to own multibagging stocks, but it's not always so easy to find them. You need a stock that has a lot of high revenue growth, is trading at a reasonable valuation, and has a large addressable market to penetrate.
And if you want to own $1 million worth of a stock, it helps to start with a significant sum like $100,000. Let's take a look at two stocks that could 10x over the long run and turn $100,000 into $1 million.
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1. Roku
Roku (ROKU -10.29%) has significantly underperformed since peaking in 2021, caught up in the tech sell-off that crushed the Nasdaq. The company has faced multiple headwinds, including a slowdown in ad spending and a poorly timed ramp-up in expenses. However, the company continues to put up solid growth in its user base and remains the leading streaming distribution platform.
In the second quarter, active accounts rose 16% to 73.5 billion, and streaming hours were up 21% to 25.1 million, showing that demand for its services remains strong despite weaker revenue.
The company is expanding its addressable market by entering new markets in Latin America, and it should be a significant beneficiary from the push into ad-based tiers from streaming services like Netflix and Disney and the accelerating shift from linear TV to streaming.
Roku has struggled on the bottom line lately with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $17.8 million and an operating loss of $126 million on a generally accepted accounting principles (GAAP) basis on $847 million in revenue.
Roku stock is still down more than 80% from its earlier peak, and that sell-off sets up a buying opportunity in the stock, especially since the business should see stronger revenue growth return once the digital ad market rebounds. At a market cap of $11 billion today, there's plenty of room to run for the stock to be a 10-bagger.
2. Kura Sushi
Plenty of restaurant stocks have been disappointments on the market, but there have been a few big winners in recent years. Chipotle may be the most obvious example, as the stock is up about 40 times since its 2006 initial public offering (IPO).
One new restaurant stock that seems to have similar explosive potential is Kura Sushi (KRUS 4.25%), a chain best known for its revolving sushi bars, where patrons can choose from sushi that goes around a bar on a conveyor belt or order from a traditional menu. It's a subsidiary of Kura Japan, where the concept has been a big success, and the company went public in the U.S. in 2019.
Kura's recent results show why the company has 10-bagger potential. Comparable sales rose 10.3%, driving 29.5% revenue growth to $49.2 million. Restaurant-level profit margins came in at 23.5%, a strong clip, although the company is only minimally profitable overall. Adjusted EBITDA rose 61% to $5.1 million.
The company's restaurants also bring in average unit volumes close to $4 million, making it one of the most popular restaurant chains based on traffic, indicating demand for more locations. Kura Sushi finished its fiscal third quarter with 47 locations, and the company expects to open at least 300 restaurants, which it could easily expand beyond.
If it's able to execute on that growth plan and ramp up profitability, the company could see its current market cap of around $1 billion jump by 10 times over the long haul. The stock trades at a price-to-sales ratio of 5, which looks like a great price for a stock with this kind of growth. In a competitive industry, Kura Sushi appears to have a bright future in front of it.