Please ensure Javascript is enabled for purposes of website accessibility

Investing in Up-and-Coming Stocks

A closer look at some of the most exciting up-and-coming companies.

By Matthew DiLallo – Updated Nov 10, 2022 at 5:15PM

Some of the best growth stocks aren't household names, at least not yet. These up-and-coming companies are still relatively early in their growth cycle. Investors can potentially earn enormous returns as they reach their full potential.  

Here's a closer look at some of the most intriguing up-and-coming growth stocks. While they're riskier than more mature companies, they offer some of the highest return potential for investors. 

A person looking at a stock chart on a laptop.
Image source: Getty Images.

Top up-and-coming stocks

One of the best long-term investment strategies for increasing wealth is investing in the stocks of companies rapidly expanding their businesses by tapping into new market opportunities such as solving major problems. Those who invest money in emerging companies often reap the highest rewards.

However, not every up-and-coming company is successful, making this a higher-risk strategy. Still, the reward can be well worth taking the chance of investing in an up-and-coming company since one big win can produce game-changing returns.

With that upside potential in mind, here's a list of 11 up-and-coming stock ideas investors might want to consider:

Data source: Company websites and YCharts. Market cap data as of Oct. 9, 2022.
Stock Ticker Symbol Market Cap Description
Bill.com Holdings (NYSE:BILL) $21.3 billion A software company that helps automate the receipt and payment of bills and invoices.
Coinbase Global (NASDAQ:COIN) $33.4 billion The largest cryptocurrency exchange.
CrowdStrike Holdings (NASDAQ:CRWD) $52.8 billion A cloud-based cybersecurity company.
Docebo (NASDAQ:DCBO) $1.6 billion A cloud-based learning management platform.
MongoDB (NASDAQ:MDB) $13 billion A developer data platform company.
Lemonade (NYSE:LMND) $1.5 billion An AI-powered insurance company.
Opendoor Technologies (NASDAQ:OPEN) $5.3 billion A real estate technology company focused on iBuying.
Snowflake (NYSE:SNOW) $67.4 billion A cloud-based data storage platform.
Teledoc Health (NYSE:TDOC) $10.9 billion A telehealth provider.
Upstart Holdings (NASDAQ:UPST) $7.1 billion Helps financial institutions make AI-driven lending decisions.
Zscaler (NASDAQ:ZS) $32.0 billion A cloud-based cybersecurity company.

Here's a closer look at these up-and-coming companies:

1. Bill.com

Bill.com is a fintech company that helps small and medium-sized businesses optimize their payment systems. The company's software automates the receipt and payment of bills and invoices. It works seamlessly with most popular accounting programs and makes it easy for companies to approve payments.

The artificial intelligence (AI)-enabled, cloud-based company increased its revenue by a whopping 169% in fiscal 2022. The company organically expanded its revenue by 77%, while the acquisitions of Divvy and Invoice2go provided an additional boost to its top line. Bill.com expects to continue increasing its customer count and transaction volume and expanding its relationships with existing customers. That should enable it to continue growing briskly in the future.

2. Coinbase Global

Coinbase Global is the largest cryptocurrency exchange in the U.S. It allows users to buy and sell cryptocurrencies such as Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH). The platform completed its initial public offering (IPO) in 2021. 

Coinbase had 9 million monthly transacting users at the end of 2022’s second quarter. While that was off its peak due to a steep slide in cryptocurrency values, the exchange has grown significantly in recent years. As more people start trading cryptocurrency and other digital assets, Coinbase will likely continue thriving.

3. CrowdStrike Holdings

CrowdStrike Holdings is a cloud-based cybersecurity platform. It relies on big data and AI to detect threats and stop breaches.

Cybersecurity is a rapidly expanding market considering that threats continue to grow. As a result, CrowdStrike increased its annual recurring revenue (ARR) by 59% in the second quarter of its 2023 fiscal year to $2.14 billion. The company sees ARR rising to $5 billion by its 2026 fiscal year. That’s only a faction of the opportunity it sees ahead. CrowdStrike believes its total addressable market opportunity should reach more than $158 billion by 2026 as the market grows and the company expands its capabilities.

4. Docebo

Docebo is a software-as-a-service (SaaS) company offering cloud-based educational and training resources to businesses. Its software includes the Learn learning management system. This solution allows businesses to train their workers and educate customers. 

The company is rapidly expanding its customer count and contract value, with the value of its average contract jumping four-fold since 2016. That helped to drive more than 35% annual revenue growth for the software company. It's adding new customers to its platform all the time, which should continue producing robust revenue growth.

5. MongoDB

MongoDB is a developer data platform company. It empowers users to create, transform, and disrupt industries by allowing them to capitalize on the power of software and their data through its Atlas platform.

The company is growing briskly. Revenue rocketed 53% in the second quarter of 2022, producing 73% growth for its Atlas segment as the company saw a record number of new customers in the period. MongoDB expects to continue expanding rapidly as more customers join its Atlas platform to unleash the power of their data.

6. Lemonade

Lemonade is a tech-based insurance company. It uses an AI-powered platform to make it easier for customers to buy insurance and process claims. Customers can buy a new insurance policy in a matter of minutes. Meanwhile, Lemonade can process claims in a few seconds instead of the days it often takes traditional insurance companies to process and pay out claims. 

The company is growing quickly. Its customer count passed 1.5 million in mid-2022, up 31% year over year. It's also collecting a higher premium per customer (up 18% year over year) as it expands its offerings to include renters', home, life, auto, and pet insurance. Lemonade is also expanding internationally, having entered the UK market in late 2022, following prior launches in France, Germany, and the Netherlands. With the insurance industry ripe for disruption, Lemonade can squeeze out a lot of growth by grabbing more market share.

7. Opendoor Technologies

Opendoor is a real estate technology company primarily focused on iBuying. It allows people to purchase and sell homes directly on the platform instead of from each other. That makes the process smoother for all involved, taking away a lot of the stress from the buying and selling process.

About $1.6 trillion of homes change hands in the U.S. each year, representing a massive opportunity for Opendoor. The company purchased more than 14,000 homes in the second quarter of 2022, up 66% year over year. It also sold more than 10,000 homes, recording a profit on its total sales. As it continues expanding home purchases, Opendoor will showcase its platform's ease to more buyers and sellers, which could take iBuying mainstream.

8. Snowflake

Snowflake operates a cloud-based data warehouse platform. It offers companies solutions to store all the data they collect while also making it easily accessible. 

The company is expanding rapidly. Snowflake's product revenue soared 83% in the second quarter of its 2023 fiscal year, powered by new customers and expanding sales to existing ones. Snowflake sees a massive $248 billion future market opportunity for its cloud data platform. Its ability to capture this growing opportunity will help it to continue delivering strong financial results.

9. Teledoc Health

Teledoc is a videoconferencing platform that allows patients to access medical professionals. It's more convenient and less expensive than in-person visits to a doctor's office. The company is building an end-to-end virtual healthcare platform to make it even easier for people to get medical care . 

Revenue jumped 21% during the first half of 2022 as more patients and providers use its platform. Although the stock was trading below its pre-COVID price as of late 2022, as more people virtually connect with medical professionals, Teledoc should be able to continue expanding its revenue at a rapid pace.

10. Upstart Holdings

Upstart provides an AI-driven tech platform that allows financial institutions to make smarter lending decisions. The company's platform takes more than 1,000 variables into account when evaluating a potential borrower, a much more robust system than traditional credit score-based approvals. That allows it to quickly approve more loans (71% receive instant approval) at lower rates than traditional underwriting programs.

Upstart is growing rapidly. Total revenue jumped 18% year over year in the second quarter of 2022. The company is just scratching the surface of its potential. Upstart started in the small personal loan market ($129 billion in opportunities) but has since expanded into the $770 billion auto loan market.

The fintech company has the potential to wade even deeper into the $6 trillion annual loan origination market for consumers and small businesses as it secures more partners. That gives it lots of room to continue increasing its consumer finance offerings while bolstering its customer count. That should power continued robust growth for Upstart investors.

11. Zscaler

Zscaler is a cloud-based cybersecurity platform. Increasingly, employees and customers need to access information stored in offsite data centers instead of a central server. They're also often accessing it from remote locations instead of at the office. Zscaler helps them securely get this information from remote locations. 

The company's revenue shot up 62% in its 2022 fiscal year, topping the $1 billion milestone. It set an ambitious goal to boost its ARR to $5 billion in the coming years. Zscaler aims to achieve that bold target by bringing new customers into its network and upselling existing ones. It can also expand into new regions and segments while increasing its functionality and providing new platform solutions.

These up-and-coming stocks are worth a closer look

These tech-powered companies are all working to provide innovative solutions to some of the biggest problems facing other businesses and consumers. Their innovation positions these up-and-coming stocks for robust growth in the coming years. Investors should at least consider putting them on the watch list.

Matthew DiLallo has positions in Bill.com Holdings, Inc., CrowdStrike Holdings, Inc., Lemonade, Inc., MongoDB, Opendoor Technologies Inc., Snowflake Inc., Teladoc Health, Upstart Holdings, Inc., and Zscaler. The Motley Fool has positions in and recommends Bill.com Holdings, Inc., Bitcoin, Coinbase Global, Inc., CrowdStrike Holdings, Inc., Docebo Inc., Ethereum, Lemonade, Inc., MongoDB, Opendoor Technologies Inc., Snowflake Inc., Teladoc Health, Upstart Holdings, Inc., and Zscaler. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.