Merging company

Want $1 Million in Retirement? Invest $100,000 In These 3 Stocks And Wait A Decade

Many investors think they need at least $1 million to retire comfortably in the United States. But according to a recent Schoeders poll, only 24% of American workers expect to cross that threshold when they retire.

Reaching $1 million can be difficult if you only put your money in savings accounts or CDs. But if you spread your savings over a few promising growth stocks, you could potentially turn a $100,000 account into over $1 million in ten years.

Image source: Getty Images.

To achieve this, investors should focus on companies that can potentially grow their annual revenue tenfold – or at a compound annual growth rate (CAGR) of at least 26% – from 2022 to 2032. That may sound difficult, but I believe that three growth values ​​– Rivian (NASDAQ: RIVN), MercadoLibre (NASDAQ: MELI)and Twilio (NYSE: TWLO) – could help generate those millionaire earnings.

1. Rivian

Rivian is a producer of electric pickup trucks, SUVs and delivery vans for Amazon (NASDAQ: AMZN). Amazon and Ford are its two largest backers, and it recently partnered with Mercedes-Benz co-develop electric vans via a new joint venture.

Rivian stands out in the EV market because it went public via a traditional IPO instead of merging with a SPAC (Special Purpose Acquisition Company), and it has already manufactured thousands of vehicles while most of its SPAC-backed peers are still struggling to produce a single vehicle or ramp up production.

Rivian has already produced 14,317 vehicles so far in the first three quarters of 2022, and it expects to produce 25,000 vehicles for the full year. Analysts expect its annual output to almost quadruple next year as it rolls out its R1S SUV and delivers more R1T pickups and delivery vans, and continues to climb over the next few years.

Rivian currently has an annual production capacity of 150,000 vehicles, but it expects its annual capacity to reach 600,000 after opening its second plant in Georgia in 2024. Based on these expectations, analysts s expect Rivian’s revenue to grow from $1.82 billion in 2022 to $12.19 billion. in 2024, which would represent a staggering CAGR of 159%. If it continues to expand its operations through the end of the decade, it could easily generate big multibagger gains for investors who overcome its initial volatility. Its stock also looks reasonably priced right now at five times next year’s sales.

2. MercadoLibre

MercadoLibre is Latin America’s largest e-commerce company, but it’s still worth less than $50 billion, making it a baby compared to Amazon’s market capitalization of $1.2 trillion. But MercadoLibre is growing much faster than Amazon, and it could still have plenty of room to grow as income levels and e-commerce penetrations increase in Latin America.

Latin America’s e-commerce penetration rate could double from around 8% today to 16% by 2025, according to Fidelity, and then rise to 50% over the “coming decades”. Americas Market Intelligence also expects Brazil, Argentina and Mexico – MercadoLibre’s three largest markets – to grow at CAGRs of 22%, 32% and 24%, respectively, from 2021 to 2024. .

Therefore, MercadoLibre’s revenue could easily skyrocket over the next ten years. For now, analysts expect its annual revenue to grow from $10.5 billion in 2022 to $16.6 billion in 2024, which would represent a CAGR of 26%. This growth should also be amplified by the expansion of Mercado Pago, its digital payment platform for onsite and offsite payments.

MercadoLibre is well positioned to generate double-digit sales growth for the foreseeable future as it locks in more buyers in Latin America, but its stock still trades at less than four times next year’s sales. This makes it a great addition to any retirement portfolio.

3. Twilio

Twilio’s cloud-based communications platform manages integrated voice calls, text messages, and other content for mobile apps. Instead of building these features from scratch, which can be buggy and difficult to scale, developers simply outsource them to Twilio with a few lines of code. Twilio then charges developers a usage-based fee to access its platform.

Twilio enjoys a first-mover advantage in this market, and large companies like Airbnb, Lyft, and Stripe use all of its services. It has been criticized for relying too heavily on acquisitions to drive growth in the past, but it still expects to grow revenue by around 30% organically over the next few years as the market mobile applications continue to develop.

Shares of Twilio are trading at less than three times next year’s sales, which is a surprisingly low price-to-sales ratio for such a high-growth stock. It’s trading at this discount because investors are concerned about its gross margins, which have recently been squeezed by new wireless fees (which are now charged whenever third-party apps access a carrier’s network), as well than a higher mix of lower margins overseas. income over the past year.

Still, Twilio doesn’t seem too worried. It expects its adjusted gross margins to exceed 60% in the long term – up from 53% in 2021 – as it expands its platform and locks in more apps. If that happens, his earnings will stabilize, the bulls will surge, and he could generate massive multibagger gains over the next ten years.

10 Stocks We Like Better Than Rivian Automotive, Inc.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Leo Sun has positions at Amazon and MercadoLibre. The Motley Fool holds positions and endorses Airbnb, Inc., Amazon, MercadoLibre, and Twilio. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.