Rising interest rates and other macro headwinds drove many investors away from hypergrowth stocks over the past two years. However, that sell-off also compressed many of those stocks' valuations to more sustainable levels.
Therefore, investors who can tune out the near-term noise should consider investing in a few companies that could at least triple their annual revenues by the end of the decade. These three volatile growth stocks fit that description: Lucid Group (LCID 0.71%), Symbotic (SYM 8.53%), and CrowdStrike (CRWD +0.74%).
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1. Lucid Group
Lucid's stock has declined nearly 90% since the company went public by merging with a special purpose acquisition (SPAC) company in 2021. The luxury electric vehicle (EV) maker quickly ran out of juice as it broadly missed its own production targets.
NASDAQ: LCID
Key Data Points
After initially claiming it could produce 20,000 Air sedans in 2022 and 49,000 sedans in 2023, it only pumped out 7,180 sedans in 2022 and 8,428 sedans in 2023. It blamed that painfully sluggish start on supply chain constraints and other macro headwinds, but it believes it can significantly ramp up its production as it expands its AMP-1 plant in Arizona and its new AMP-2 plant in Saudi Arabia. It also plans to roll out its second vehicle, the Gravity SUV, this year.
Lucid is still firmly backed by the Saudi Arabian government, which owns more than 60% of its shares through its Public Investment Fund (PIF). Analysts also expect its revenue to soar at a compound annual growth rate (CAGR) of 148% from $618 million in 2023 to $3.8 billion in 2025 -- so it could be significantly undervalued right now at 6 times next year's sales. Lucid is still deeply unprofitable, but it says it has enough cash to last through 2025. If it successfully ramps up its production, its revenue could surge even higher from 2025 to 2030 and drive its stock toward big multibagger gains.
2. Symbotic
Symbotic provides warehouse automation services for large retailers. It claims the installation of just one of its $50 million modules (which bundle together its robots and software) can generate $250 million in lifetime savings over 25 years.
NASDAQ: SYM
Key Data Points
Symbotic notably generated 88% of its revenue from Walmart, which is also one of its top investors, in fiscal 2023 (which ended last September). However, it's gradually expanding beyond Walmart by signing new automation deals with other big customers like Target, Albertsons, C&S Wholesale, and GreenBox -- a new warehouse-as-a-service joint venture it formed with its other big backer SoftBank. That growing list of partnerships could help it establish a meaningful lead in the fragmented warehouse automation market.
Symbotic also went public by merging with a SPAC, but its stock has soared 130% since its first trading day in 2022. Its stock doesn't look cheap at 15 times this year's sales, but it could have plenty of upside potential. Analysts expect its revenue to grow at a CAGR of 44% from $1.2 billion in fiscal 2023 to $3.5 billion in fiscal 2026, and it could have even more room to run as more retailers fully automate their warehouses.
3. CrowdStrike
CrowdStrike is a cybersecurity company that only provides cloud-native security services. That disruptive approach eliminates the need for on-site appliances, which are generally expensive, take up a lot of space, require constant maintenance, and are difficult to scale as an organization expands.
NASDAQ: CRWD
Key Data Points
CrowdStrike's first-mover advantage in the cloud-native security space has enabled it to grow like a weed since its IPO in 2019. From fiscal 2018 to fiscal 2023 (which ended last January), its revenue grew at a CAGR of 80%. Analysts expect its revenue to increase at a CAGR of 31% from $2.2 billion in fiscal 2023 to $5.0 billion in fiscal 2026.
That growth is being driven by its market share gains and the rising adoption of its cloud-based modules. In its latest quarter, 42% of its customers had already adopted at least six of its modules, compared to just 36% of its customers a year ago.
Even if CrowdStrike continues to grow at a more modest CAGR of 25% from fiscal 2026 to fiscal 2030, it could generate more than $12 billion in revenue by the final year. It will also likely inorganically expand its ecosystem of cloud-based services by gobbling up even more companies. Its profitability has also been improving as its revenue growth cools off.
CrowdStrike's stock has soared nearly 190% over the past 12 months and might seem a bit pricey at 20 times next year's sales, but its dominance of the cloud-native cybersecurity space justifies that premium valuation.
