It's not difficult to identify the market's top growth stocks right now -- just look around. Giants like Alphabet, Shopify, and Tesla are frequently highlighted as the current powerhouses, and for good reason.
Figuring out the names that will be the best growth stocks at the end of this decade, however, is a trickier endeavor. Much about the environment can change in eight years' time, and many of today's up-and-comers could be peaking by then. It takes careful observation and much thought to see where the top opportunities might lie nearly a decade from now.
That being said, here's a rundown of three companies that will likely emerge as must-have growth stocks.
1. National Beverage
You may be more familiar with National Beverage(NASDAQ: FIZZ) than you realize. It's the company behind La Croix sparkling water, Everfresh juice, Shasta and Faygo soda, and Ohana fruit punch, just to name a few.
In a market that includes competitors like Coca-Cola and PepsiCo, it's tough to see any other outfit in the business making a dent in the leaders' market share. Don't dismiss the idea, though. Consumers are fickle, frequently (and increasingly) wanting to try something different just for the sake of change. And the current shift in consumer preferences plays right into the hands National Beverage is holding.
For instance, the world continues to drink more water and less soda, aware of the health benefits of doing so. Consumers increasingly want their water to offer a bit of flavor, though. La Croix does. Consumers are also developing tastes for more citrus and fruit flavors with recent research from FlavorSum citing watermelon, lime, cherry, pineapple, and apple as the fastest-growing flavor preferences. Those are relatively rare flavors in most grocery stores' beverage aisles until you find the Faygo and Shasta sections. Between its two soda brands, National Beverage can satisfy.
What's missing right now is some sort of catalyst that will push these secondary brand names into the mainstream. Projected sales growth of just a little over 5% this year and next year is respectable but hardly what can be considered high growth. The company's got eight years to tinker with an evolving market, however, made up of a growing number of consumers that didn't necessarily grow up drinking Pepsi or Coke. Fragmenting the market to its advantage will be key, and an acquisition or two could help do the job.
2. CyberArk Software
CyberArk Software(NASDAQ: CYBR) isn't exactly a household name. But there's a good chance you or someone in your household benefits from its service. Those chances will only improve in time as well.
Broadly speaking, CyberArk helps enterprises that are managing computer networks keep those networks digitally secure. Specifically, the company offers identity security solutions that ensure someone logging into a network is truly an authorized user. Also, as part of its offerings, CyberArk helps companies maintain digital compliance with regulations, manage developmental pipelines, and defend against ransomware attacks. It has products specifically designed for organizations ranging from banks to healthcare providers to federal government agencies.
The need for such cybersecurity is as strong as it's ever been. It's not apt to abate over the next eight years, either. Indeed, the need for digital protection will only grow during that time as the world increasingly depends on the cloud, and most users access it remotely. CyberSecurity Ventures forecasts that cybercrime will cost the world $10.5 trillion in 2025, well up from 2021's figure of $6 trillion. It's unlikely hackers will give up then -- it's far more plausible they'll continue to refine their craft, looking to exploit the continually growing complexities of networks that are sure to take shape in the meantime.
There are several cybersecurity stocks that stand to benefit from this dynamic. CyberArk is one of the top choices due to the nature of its core technology, though. That's the aforementioned personal-identity security platform, cutting off cyber-criminals before they even get a chance to break into a network. In fact, CyberArk Software was just named SC Media's Best Identity Management Solution for 2022. The accolade speaks volumes, foreshadowing its success well into the future.
3. DraftKings
Any investor thinking the Supreme Court's 2018 decision to strike down the (mostly) nationwide ban on sports-based betting would be a boon for the business has been mostly disappointed. The industry has grown since then but not by leaps and bounds. Individual states must still legalize sports wagering within their borders and then regulate it. That takes time. To this end, according to the American Gaming Association, only 31 U.S. states have legalized sports betting. Even within many of those states, the type of betting that can be done remains rather restricted. Mobile app wagering, for example, is only allowed in 21 states.
Eight years from now, though, many more states should have things figured out.
Enter DraftKings(NASDAQ: DKNG). While its roots are in the fantasy sports business, its future is in the sports betting market. Just this month, the company launched its mobile sportsbook in Kansas, following May's launch of a comparable app offered to sports fans in Ontario. It also recently opened a brick-and-mortar sportsbook in Louisiana and Michigan, both of which offer immersive experiences that rival any amenity found on Las Vegas' main strip. These launches extend a long streak of similar progress, and more time will only provide DraftKings opportunities to build more such profit centers.
And the opportunity is certainly on pace to become enormous in the meantime. Market research outfit Technavio estimates the legal sports wagering market will grow by more than 10% per year between now and 2026, ending that five-year stretch nearly $144 billion bigger than where it started. Also, bear in mind that many states still won't have their sport-based betting laws and permissions put in place by then, setting the stage for years of post-2030 growth for DraftKings.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet (A shares). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Shopify, and Tesla. The Motley Fool recommends National Beverage and recommends the following options: long January 2023 $1,140 calls on Shopify, long January 2024 $47.50 calls on Coca-Cola, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.
