As the calendar flips to October, investors are bracing themselves for a potential surge in the stock market. History suggests that this month could be a turning point, with the S&P 500 experiencing significant rallies on numerous occasions since World War II. While past performance is no guarantee of future success, two companies stand out as promising long-term investments: Shopify and Uber Technologies.
Shopify has established itself as a leader in e-commerce and omnichannel commerce software, providing businesses of all sizes with a comprehensive platform to manage sales across various channels. Its turnkey approach has attracted a wide range of clients, from small startups to large enterprises. The company’s recent quarterly results were impressive, with revenue increasing 21% to $2 billion and non-GAAP earnings surging 85% to $0.26 per diluted share.
Moreover, Shopify has made significant progress in physical retail, wholesale commerce, and international markets, positioning itself for sustained growth. With Wall Street expecting earnings to increase at a 45% annual rate over the next three years, the current valuation of 82 times earnings appears reasonable.
Uber, on the other hand, has successfully diversified its business into three segments: mobility, delivery, and freight. Its ability to offer ridesharing and delivery services through a single platform has created a powerful ecosystem, with cross-promotional activities driving user engagement. The company’s proprietary data also provides a valuable competitive advantage, enabling it to connect consumers with relevant advertising and optimize its services.
Uber’s recent quarterly results were solid, with monthly active platform consumers rising 14% to 156 million and revenue increasing 16% to $10.7 billion. With Wall Street anticipating earnings growth of 48% annually over the next three years, the current valuation of 84 times earnings looks reasonable.
While there are no guarantees in the stock market, Shopify and Uber Technologies appear well-positioned for long-term success. Investors who buy a small position in these companies today and hold them for at least three to five years could be rewarded with substantial returns.
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