2 Incredible Growth Stocks I Can't Stop Buying

Amidst high market valuations, particularly in AI, the article identifies Remitly (RELY) and Airbnb (ABNB) as compelling growth stocks trading at attractive valuations. Remitly, a mobile remittance disruptor, is experiencing rapid growth with 40% year-over-year send volume and 34% revenue increase, now generating operating profit and trading at a 2.4x price-to-sales ratio despite market concerns. Meanwhile, Airbnb continues its 13% year-over-year revenue growth driven by global travel expansion and international penetration, yet trades at an enterprise value-to-EBIT of 27, below the S&P 500 average, suggesting significant upside potential.

Analysis

Amidst a market characterized by elevated valuations, with the S&P 500 trading at a P/E of 31 and AI-related stocks like Microsoft (P/E 38) and Palantir (>100x sales) commanding high multiples, the article identifies Remitly (RELY) and Airbnb (ABNB) as growth opportunities with more reasonable valuations. Remitly, a mobile remittance disruptor, demonstrated robust operational performance last quarter with send volume growing 40% year-over-year to $18.5 billion and revenue increasing by 34%. The company is now generating an operating income of $6.5 million and trades at a price-to-sales ratio of just 2.4, indicating significant potential for operating leverage as it moves through a profit margin inflection.

Investor concerns regarding stablecoin disruption, remittance taxes, and immigration crackdowns are addressed, with the article suggesting these factors are either non-disruptive or potentially beneficial to Remitly's business model. The company's strong gross margin and continued market share capture underpin its projected 'huge profit inflection' over the coming years.

Airbnb, despite its share price being down 41% from 2021 highs, continues to exhibit strong growth, with revenue up 13% year-over-year last quarter. Its growth is fueled by the expanding global travel market, strategic international expansion into markets like Japan, and a demographic skew towards younger travelers. The platform also possesses multiple future growth levers, including sponsored listings, new categories, and a customer loyalty program.

Trading at an enterprise value-to-EBIT of 27, Airbnb's valuation is presented as a bargain, sitting below the S&P 500's average P/E ratio, suggesting a long runway for expansion and continued double-digit revenue growth over the next decade.

Key Decisions for Investors

• Investors should consider initiating or increasing positions in Remitly (RELY) and Airbnb (ABNB), given their demonstrated growth and attractive valuations compared to the current market.
• Monitor Remitly's operating income and gross margin expansion for signs of accelerating profit inflection, which could significantly enhance shareholder value.
• Assess Airbnb's progress in international market expansion and the development of new revenue levers, such as sponsored listings and loyalty programs, for sustained long-term growth.