It's easy to screen for this year's biggest winners. A lot of stocks have doubled -- and a couple have even tripled -- in 2023. Picking the winners for next year is the real assignment. Why stop at 2024? Let's go out seven years to pick out the names that could be the top growth stocks of 2030.
Some of the best growth stocks come 2030 might not even be trading publicly yet. However, among the companies that you can buy now two that I think can emerge as winners are Opendoor Technologies (OPEN 3.38%) and Nu (NU 1.66%). Let's take a closer look.
1. Opendoor Technologies
It's fair if Opendoor Technologies isn't the name at the top of your list of real estate stocks. As a flipper of residential properties, Opendoor's business has fallen dramatically as rising mortgage rates and percolating recessionary fears have cooled buyer demand.
Revenue that more than doubled in three out of four years before settling for a mere 94% top-line pop in 2022 has shifted into reverse. Opendoor is stepping on the gas while it's going backwards. Quarterly revenue has clocked in with year-over-year declines of 25%, 39%, and, more recently, 53%. It's only getting worse, as analysts are bracing for a 66% drop for the quarter that ends next month.
The surprising twist here is that Opendoor is already one of the biggest gainers of 2023. Remember when I mentioned that a couple of stocks have already more than tripled this year? Opendoor is up 201% year to date. Longtime investors aren't breaking out the high fives. The shares are still 91% below their all-time high in early 2021.
Image source: Getty Images.
The Opendoor iBuying model seemed solid when property prices were rising, often ending in bidding wars. Opendoor would target unattractive homes in attractive markets, spruce them up, and sell them to eager buyers. Things were going so well that Zillow Group and Redfin would eventually toss their hats into the ring. The new players weren't ready for the market reversal, and they weren't necessarily very good at it even when the real estate scene was happening. Zillow surrendered in late 2021. Redfin followed Zillow through the exit sign of home flipping last year.
Opendoor has made some moves to stay afloat, announcing layoffs and cutting costs. It's still at least three years away from projected profitability, but it can get there sooner if the real estate market bounces back sooner rather than later. The reason I like Opendoor as a winner here is because when the climate improves for iBuyers it won't have to compete with Zillow or Redfin. The housing market will likely look radically different by 2030, but Opendoor will likely be padding its lead by that point.
2. Nu
Opendoor is experiencing a retreat with its business, but that is certainly not the case with Latin America's Nu. The Brazil-based provider of digital financial services is on a roll. It had 79.1 million Nubank customers at the end of March, and growth is just starting to scratch the surface.
Revenue rose 85% -- or 87% on a currency-adjusted basis -- to $1.6 billion in this year's first quarter. The combination of a 33% surge in customers and a 28% increase in average revenue per account is working wonders for top-line gains. The news is even better on the other end of the income statement. Nu's gross profit rocketed 124% higher on a constant currency basis through the first three months of this year. It has been profitable on an adjusted basis for three consecutive quarters.
You won't have to wait long to get fresh financials. Nu reports its second-quarter results after Tuesday's market close. Nu has become a juggernaut in Brazil, with nearly half of the country's adult population having a Nubank account. This isn't too shabby for a platform that launched only nine years ago. Expanding outside of its home turf will be more challenging, but Nu did break into Mexico and Colombia a couple of years ago.
Nu chose a poor time to go public, hitting the market in late 2021 when investors were tiring of fintech stocks. The opportunity should be better by 2030 when it is a dominant digital banking choice in more than just Brazil. Nu has nearly doubled in 2023, but the runway is long.
