If you own a stock that doubles in the next six years, you'll be in good shape. If it triples in that time, you will probably have easily beaten the market. But what if you can do even better?
Turning $1,000 into $5,000 between now and 2030 isn't an easy feat. It requires the initial instinct to pick a winner, followed by the patience to see it through. There will be five-baggers in that time. I think Roku(NASDAQ: ROKU), Royal Caribbean(NYSE: RCL), and Celsius are three stocks that can soar fivefold in the next six years. Let's take a closer look.
1. Roku
Roku is volatile. Shares of the streaming video-on-TV pioneer have nearly doubled since the start of last year, but the stock is also trading lower in 2024. Roku stock has plummeted 85% since peaking in the summer of 2021, so it wouldn't even have to hit a new high to turn $1,000 into $5,000 right now.
A lot of people underestimate Roku, and if you flesh out the performance based on the now distant all-time highs, you can't really blame them. Take a closer look, and you'll see a company that has been able to defy the odds. Even though it's competing against some of the wealthiest consumer tech companies, a springtime report showed that Roku's operating system was involved 47% of the time folks in the U.S. spent streaming on connected TVs. That's three times higher than its closest rival.
Image source: Getty Images.
Consumers aren't streaming less. Roku has 83.6 million streaming households leaning on Roku to power up their favorite content apps, a 14% increase over the past year. Engagement is also perpetually on the rise. Analysts see years of low-double-digit revenue growth, and losses are a problem, but the deficits are narrowing. Profitability is expected by 2027, but with analysts trimming their near-term loss targets, don't be surprised if it happens earlier than that.
Things naturally have to go right for a fivefold advance from here by 2030. Roku will have to continue to dominate this niche. It's just scratching the surface in terms of connected TV advertising, and marketers will make it a priority to get in front of the massive audience that Roku attracts. International expansion will also have to go well for the volatile but promising streaming service stock. It also wouldn't hurt if Roku continues to deliver "beat and raise" quarterly performances.
2. Royal Caribbean
Unlike Roku, Royal Caribbean hit an all-time high last week. The world's second largest cruise-line operator has never been better than it is right now. Trailing revenue is at a record high. Customer deposits are also at a new high-water mark, a good sign for strong results through the next few quarters.
Calling for a stock that's already shouting "I'm the king of the world" to be a five-bagger by 2030 may seem brazen. The stock has more than tripled since the start of last year. But the upticks might be just getting started.
Royal Caribbean was the first of the publicly traded cruise lines to return to profitability after the pandemic. The COVID-19 crisis was brutal for the industry, but it helped ignite consumer appetite for sailings while also giving the operators time to improve their monetization per passenger.
Royal Caribbean is back, and not just because it just paid its first quarterly dividend in more than four years. The stock is also cheap. Despite the rally, the shares are trading for just 13 times next year's earnings. Earnings should continue to grow faster than revenue, so it may remain cheap even after potentially popping fivefold from here. After all, the stock more than tripled in less than two years, and its forward multiple is in the low teens.
Should you invest $1,000 in Roku right now?
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Rick Munarriz has positions in Roku and Royal Caribbean Cruises. The Motley Fool has positions in and recommends Roku. The Motley Fool has a disclosure policy.
