XRP has been one of the most explosive winners in the cryptocurrency space over the last year. Even with a recent valuation pullback, its token price is up 372% across the stretch. With that performance, it now has a market cap of roughly $139 billion and stands as the world's third-largest cryptocurrency.
However, while potential catalysts, including political shifts and increased adoption for the coin, could potentially push XRP's token price far above current levels, investors seeking explosive growth plays shouldn't put all their eggs in one basket. If you're willing to take on relatively high levels of risk in pursuit of huge returns, read on for a look at two investment opportunities that could outperform XRP over the next three years.
This tech platform is a no-brainer for growth
Jennifer Saibil (Toast): Toast (TOST +3.89%) is a quirky name for a powerhouse tech platform that's making waves in the restaurant industry. Its platform connects and streamlines all of a restaurant's operations with end-to-end features, syncing orders with kitchen prep and inventory with accounting. It's a cloud-based venture that makes it easier, faster, and cheaper to run an eatery, and it's the future of restaurant management.
NYSE: TOST
Key Data Points
As you might imagine, restaurants have been flocking to the platform. It added 7,000 new locations in the 2024 third quarter for a total of 127,000, a 28% increase year over year. New locations generate higher gross payment volume, which increased by 24%, and higher revenue. It uses annualized recurring run rate as its favored top-line metric, and it was up 28% in the quarter to $1.6 billion. That level of scale is also leading to positive net income, which switched from a $31 million loss last year to a positive $56 million in the third quarter. As more restaurants sign up for Toast's services, those numbers should keep growing.
There are several ways for Toast to generate higher sales, and it has a multi-pronged strategy to achieve growth. It benefits from a strong flywheel effect; satisfied customers refer new clients, creating brand awareness and a communal shift toward restaurant management software.
The restaurant industry itself is growing, and since Toast takes fees for payment processing, it grows its revenue as its clients do. Restaurant sales have increased fivefold over the past 30 years and have been accelerating over the past few years. Toast has 13% of its total addressable market right now, but that market is increasing. It's also expanding internationally, where it already has about 2,000 live locations. Finally, it's entering the grocery space with Toast Food and Beverage Retail, adding a significant market opportunity.
Toast stock is up 115% over the past year, but it has a long growth runway, and investors can still buy in today to see huge gains.
NASDAQ: PI
Key Data Points
AI and automation revolutions could make this stock a huge winner
Keith Noonan (Impinj): Impinj (PI +2.50%) is a designer of radio-frequency identification (RFID) tags, readers, and software that can be used to track and incorporate physical items into digital systems. The company's RFID tags don't require a power source and can be reprogrammed with new information. They can also be picked up and scanned by readers across relatively large distances.
In some ways, Impinj's core RFID technologies are similar to the bar-code system -- except its tags can store far more data and require less proximity to scanners in order to be read. The company is a pioneering player in the Internet of Things (IoT) trend, and its technologies are already seeing some strong adoption in retail apparel, general merchandise, and supply chain logistics markets.
Last quarter, the company's revenue increased roughly 30% year over year to hit $91.6 million. Meanwhile, the business posted non-GAAP (adjusted) net income of $16.9 million -- good for a margin of roughly 18.4%.
Unfortunately, the company guided for weaker performance in the first quarter due to customer inventory buildup and potential geopolitical headwinds -- and shares saw a big pullback as a result. Impinj is guiding for Q1 sales to come in between $70 million and $73 million, representing a roughly 6% year-over-year decline at the midpoint of the target range.
On the other hand, cyclical performance shifts have been the norm for Impinj -- and the company is still in the very early stages of capitalizing on massive growth catalysts. While retail and other core customer markets will continue to be significant performance drivers, the company may have even bigger opportunities connected to artificial intelligence (AI) and automation.
For the automation of supply chains, the company's products will allow machine systems to know where an item in a warehouse or shipping unit is without having to see it or identify it through human action or machine vision. The automation revolution is still just starting to unfold, and RFID tags and software look poised to play key roles in factory robotics systems and other aspects of manufacturing and supply chain automation.
With the stock down 56% from its high, I think Impinj will go on to deliver explosive returns for investors who buy at today's prices and hold over the next three years.
