As the S&P 500 and Nasdaq Composite hover near their all-time highs, it might seem tough to find growth stocks that can generate multi-bagger gains over the next few years. But if you dig a little deeper you can unearth a few hidden gems that still have the potential to turn a modest $1,000 investment into $5,000 by the end of this decade. Here are several to consider now.
1. Celsius Holdings
Celsius Holdings (CELH -3.34%) sells sugar-free energy drinks that are made from natural ingredients like green tea, ginger, and amino acids. It claims its drinks have "thermogenic" properties that can accelerate a person's metabolism and burn more body fat during workouts.
Image source: Getty Images.
Celsius' health-oriented approach has resonated with younger consumers, and it has become the third-largest energy drink brand in the U.S. after Red Bull and Monster Beverage. It also signed a U.S. distribution deal with PepsiCo in 2022, and continues to roll out its drinks in more overseas markets.
In 2023, Celsius' revenue soared 102% to $1.3 billion as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 316% to $296 million. Analysts expect its revenue to rise 42% in 2024 and 33% in 2025.
Trading at 10 times this year's sales, Celsius' stock isn't too pricey relative to those growth rates. If Celsius can hit those targets and continue expanding its revenue at a compound annual growth rate (CAGR) of 30% from 2025 to 2030, it could generate $9.2 billion in revenue by the final year.
That would be more than seven times higher than its revenue in 2023 -- so it could easily turn a $1,000 investment into more than $5,000.
2. On Holding
On Holding (ONON -2.64%) is a Swiss maker of athletic footwear and apparel. It carved out a niche with its proprietary CloudTec cushions, which expand while a person's foot is in the air and lock down for a firmer foundation when it hits the ground. It dominated the Swiss market with big endorsements from athletes like Nicola Spirig and Roger Federer, and it's capitalizing on its initial growth spurt to expand into the U.S. and China.
On's core growth strategy is similar to Lululemon Athletica's: It's expanding its direct-to-consumer channels to reduce its dependence on wholesale retailers, selling its products at premium prices, and maintaining its pricing power by limiting its markdowns.
In 2023, On's revenue and adjusted EBITDA soared 47% and 68%, respectively. It expects to grow its revenue at a CAGR of 26% through 2026 as it expands its direct-to-consumer channel, enters new regions, and grows its market share. If it can achieve that goal, its annual revenue would double from 1.8 billion Swiss francs ($1.96 billion) in 2023 to 3.6 billion Swiss francs ($3.9 billion) in 2026. That's an impressive growth rate for a stock that trades at just four times this year's sales.
If On achieves its goal and continues to grow its revenue at a CAGR of 20% from 2026 to 2030, it would generate 7.5 billion Swiss francs ($8.2 billion) in revenue by the final year. That would be four times higher than its revenue in 2023, and a slight increase to its price-to-sales ratio would produce a five-bagger gain by the end of the decade.
3. Coupang
Coupang (CPNG -2.60%) is the largest e-commerce company in South Korea. It operates fulfillment centers within seven miles of 70% of South Korea's population, and it locks in its customers with its Prime-like Rocket Wow subscriptions, which provide faster delivery options, free returns within 30 days, access to streaming videos, food and grocery deliveries, and other perks for a monthly fee. It's also gradually expanding beyond South Korea into Taiwan and other Asian markets.
At the end of 2023, Coupang's total number of active customers grew 16% to 21 million as its number of paid Wow subscribers increased 27% to 14 million. For the full year, its revenue rose 18% to $24 billion, its adjusted EBITDA nearly tripled, and it finally turned profitable on a generally accepted accounting principles (GAAP) basis.
Analysts expect Coupang's revenue to rise 19% in 2024 and 16% in 2025. If it matches those estimates and continues to grow at a CAGR of 15% from 2025 to 2030, it could generate $67 billion in revenue, which would be nearly three times higher than its revenue in 2023. That might not seem like enough growth to deliver a five-bagger gain on its own, but Coupang's stock looks dirt cheap right now at one times this year's sales.
By comparison, Amazon trades at three times this year's sales. So if Coupang continues to grow at a steady rate and command a higher price-to-sales ratio by the end of the decade, it could easily turn a $1,000 investment into over $5,000.
