2 Stocks That Could Turn $1,000 Into $5,000 by 2030

Although investors would be happy to see their investments grow tomorrow, the magic happens with patience. Six years from now -- 2030 -- isn't a long time, and even if not every investor has a long time horizon, many have at least until 2030. If you have longer, you'll see your money grow even more.

Turning $1,000 into $5,000 implies growing it four times from where it is today, which is a tall feat. I'm going to recommend two stocks that have that kind of potential and walk you through how they can achieve this.

None of these scenarios are a given, and things can go either way with these stocks. But if you have some appetite for risk, consider Opendoor Technologies (OPEN 3.38%) and On Holding (ONON 2.66%).

1. Opendoor: Disrupting traditional real estate

Opendoor operates a real estate marketplace and iBuying business. It has a system to buy homes quickly, do necessary work to make them sellable, and then resell through its platform. It also offers the option for homeowners to list directly on its marketplace.

With skyrocketing mortgage rates and a suppressed real estate market, this has not been a great business over the past few years. There are fewer homes for sale, and people are holding off on homebuying as mortgage rates climbed. Opendoor revenue was down a huge 71% year over year in the 2023 third quarter.

The company is well capitalized and can keep operating, and it's still buying and selling. However, its stock has plummeted. It's down 69% from its first-day closing price, and at the current price, it trades at a rock-bottom price-to-sales ratio of 0.2. Even if this ratio increases 500%, it would still be considered low if Opendoor is reporting sales growth.

It's clear how this can change pretty quickly. If Opendoor goes back to the same revenue it had last year in the third quarter next year, that's not a 71% increase, it's a 291% increase.

There's no guarantee, and there's plenty of risk to this thesis. But management is handling the situation efficiently, and if it does turn around, it'll be big. Just look at the company's prior performance: Revenue increased almost 500% from the initial public offering through its peak in 2021.

Right now, Opendoor is reposting operating losses, so it's not feasible to determine how much it can grow profitability over the next six years. But when the real estate market starts to swing up, the company will have the chance to prove its model. If it demonstrates sales growth and profitability, Opendoor can gain 500% over the next six years. But it's quite risky.

2. On Holding: Challenging premium activewear

On Holding sells premium activewear -- and, more importantly, footwear. I say more importantly because that was its first product, and the company's CloudTec sneakers have captured loyal fans across the globe.

The company has been reporting high growth despite the economy. It targets an affluent and resilient clientele who won't switch down, allowing On Holding to charge high prices without needing markdowns. Much of its merchandise isn't seasonal, which means it doesn't need to do end-of-season promotions.

Revenue increased 46% year over year in the 2023 third quarter with a 59% gross margin, and net income increased 184%, with profit margin expanding from 6.3% last year to 12.2% this year.

On Holding's brand is still relatively unknown, but it's extremely popular in its current markets. Even in its home country of Switzerland, it only has 47% brand penetration, and in the U.S., that goes down to only 9%. As it scales up and generates higher sales, profitability is rising, and margins are expanding.

On Holding stock is fairly expensive right now, which isn't surprising. It trades at a price-to-sales (P/S) ratio of 6 and a recent price-to-earnings (P/E) ratio topping 101. It isn't likely to sustain such a high valuation unless it continues to report the same kind of growth.

Let's suppose it does. On's market cap is about $9 billion today. To reach a market cap of $45 billion, its earnings would need to increase 500% as well. Trailing-12-month net income is about $90 million. To turn into $450 million, it would need to increase at a compound annual growth rate (CAGR) of 37%. That seems very doable.

Of course, if the P/E goes down, the CAGR would need to be higher to reach the same goals, but I think you get the picture that this is a possibility.

On Holding could be an incredible investment over the next six years, and 500% or not, the company should create tremendous shareholder value.