The three companies that in my opinion are great growth stocks and hold a sustainable competitive advantage Spotify (NYSE: SPOT), Okta (NASDAQ: OKTA), and Zendesk (NYSE: ZEN). They are able to disrupt much of what online businesses do, and they have the potential to become giants in their industries decades from now.
Spotify was designed to make world music accessible to users on premium or ad-supported monthly plans. And it now has 130 million premium subscribers and a solid position in the music streaming industry. But that’s not what I think will allow the company to grow over the next decade.
Over the past few years, Spotify has been rife in podcasts. The company bought Gimlet and Anchor for a combined $ 340 million last year, acquired The Ringer for almost $ 200 million, and signed a $ 100 million license agreement with Joe Rogan that will make his podcast exclusive to Spotify later this year. This really is the future of the business, and it could have decades of growth ahead, so Spotify is building up talent right now.
In music, Spotify is a big player, but it is still beholden to the labels that control the music content. But in the podcast industry, there are hundreds and maybe thousands of independent producers. If Spotify becomes the place they need to go to distribute and monetize their content, it could create an extremely valuable position in the industry.
Securing access to software has become essential for businesses and consumers alike, and this has created a valuable niche for Okta. You can see below that the company’s revenue has more than quadrupled in less than five years as people have flocked to its services.
The great thing about Okta business is that it is an independent business needed between software makers, companies and users. It’s actually a three-sided market with Okta in the middle. This means its position becomes more valuable as software partners grow, business users increase, or consumers grow.
Okta shares are still extremely expensive at 38 times sales and the company is far from profitable, but such a rapidly growing company may be worth paying the price. Investors need to consider whether Okta can start turning its net losses into profits, but that will likely happen as revenues rise and the company consolidates its leadership position in the market. And if that happens, it could be a tremendous growing stock.
Customer service has evolved rapidly over the past decade as the internet has allowed consumers to touch in new ways. And one of the increasingly common ways to reach a business is by using a Zendesk widget on a business website.
Like Okta, Zendesk has spent a lot of money to increase its revenue and grow its business, resulting in the losses you see below.
The ultimate value of Zendesk is providing the tools businesses need to deliver customer support. And with a growing range of automated and personal solutions, this is a company whose customers will increasingly need its services – especially customers who are themselves poised to be growth engines for the industry. economy as a whole. I love the potential of Zendesk for additional earnings.
High potential stocks
These three stocks are expensive in every way, but they deserve their review for a reason.
Spotify might own the podcast industry going forward, Okta is a software security giant, and Zendesk is changing customer support as we know it. These are three disruptions I’m willing to bet on, and that’s why I’m adding them as outperformance calls on my CAPS page.