2024 is here, and with it, another year presents the opportunity for investors of all experience levels to work on building a winning portfolio. You don't have to be rich to start investing in stocks. You also don't need to be a financial wizard to learn about the companies you like and find the ones that make the most sense for your portfolio, risk tolerance, and long-term financial goals.
If you're on the hunt for phenomenal growth stocks to buy in 2024 and hold for the long run, here are two names to consider the next time you go stock shopping. Let's take a closer look.
1. Shopify
Shares of Shopify (SHOP 1.37%) have experienced quite the run-up over the last year. A resurgence in investor appetite for growth stocks and rapidly improving financials brought investors back to this e-commerce business. The stock is up by close to 80% over the trailing 12 months, even though it is still down significantly from all-time highs.
Shopify experienced plenty of ups and downs over the last few years, like many growth-oriented stocks since the early pandemic surge. Bouts of unprofitability, the surprise sale of its logistics business to Flexport after it had previously expanded its fulfillment operations, and multiple waves of layoffs all dampened some investors' enthusiasm for this stock.
Shopify remains a leading provider of software, hardware, tools, and services for business owners around the world, with a footprint in more than 175 countries. At the time of this writing, the platform supports roughly 4.8 million online stores globally.
NASDAQ: SHOP
Key Data Points
The company provides a range of software and hardware, including a growing selection of extensive app integrations that make everything from order management and cross-border fulfillment to marketing and payroll management a seamless experience. Shopify serves business owners that sell across one or multiple channels, including brick-and-mortar stores and online stores.
For example, the company recently launched Retail Plan, a suite of services designed specifically for sellers with a brick-and-mortar store. The plan features all its Shopify POS (point-of-sale) Pro elements, along with other tools to launch an online presence if the merchant chooses to do so. Shopify has built a platform of tools and services that are an accessible option for entrepreneurs across a range of budgets, needs, and business sizes.
With plans starting as low as $5 a month all the way up to $2,000 a month or more for large enterprise customers (think names like Nestle and Gymshark), Shopify benefits from a sticky business model that is increasingly asset-light, particularly since it divested its logistics unit. The company makes most of its money from transaction fees, monthly or annual subscriptions that merchants pay, platform fees, app fees, and other related costs.
Yet despite Shopify's extensive footprint, management estimates that the company has only penetrated about 10% of the U.S. e.-commerce market. There's still a lot of room for this business to run, a fact that could compel forward-thinking investors to take a second look.
2. DexCom
DexCom (DXCM 0.49%) has experienced a monumental last few years in its business trajectory. The approval of its G7 continuous glucose monitoring (CGM) device injected a new wave of growth into the diabetes care business.
The G7 is marketed as being the most covered CGM on the market, with a warm-up time of just 30 minutes, roughly twice as fast as any other commercialized device to date. DexCom executed the official rollout of the device in the U.S. last year, along with launches in 15 international markets. As a result, revenue and profits have soared.
The company's extensive legwork and partnerships with both public and private payers mean that the average patient pays just $20 a month to use the G7. DexCom also makes and sells other CGM products, with its next product launch expected to be in summer 2024.
The new CGM, called Stelo, has a 15-day wear time and is designed specifically for people who have type 2 diabetes and do not use insulin. The Stelo will come with a variety of payment options for users, including cash pay. DexCom is awaiting the U.S. Food and Drug Administration's final decision for approval, with the company having submitted its application in the final quarter of 2023.
NASDAQ: DXCM
Key Data Points
DexCom may not be the only kid on the block in the diabetes care space, but it is among the most prominent, and multiple companies can win here. One of its biggest competitors is Abbott, known for its FreeStyle Libre CGMs. DexCom still serves the largest share of the Type 1 diabetic population in the U.S., while its rival maintains the leading footprint in the Type 2 diabetes market.
The approval of Stelo could be one step toward disrupting this current reality, but again, there is room for multiple players in this space.
It's also worth noting that the total addressable market of CGM wearers is expanding. This is due to a variety of factors, including the expanding use of these devices by both Type 1 and Type 2 diabetics, the growing prevalence of non-insulin users, major coverage expansions by both government-sponsored and private payers, and the rising incidence of diabetes globally.
The CGM market is still heavily underpenetrated, too. One study published in the Diabetes & Metabolism journal in 2019 estimated that CGM wearers only represented about 0.5% of the global diabetes patient population.
A separate study by UBS Securities estimates that only 30% of Type 2 diabetics will use a CGM, compared to 83% of the Type 1 diabetes patient population, by the year 2030. That still leaves plenty of room for growth in both sectors of the market.
For DexCom, which saw profits balloon to $285 million in the first nine months of 2023 alone, there appears to be a lot of room left to run.
