Even in a still difficult macroeconomic environment, you can make your money work for you and gradually move closer to your financial goals. Investing in stocks can be a great way to grow your portfolio and generate returns that will help you on your wealth-building journey over the years.
If you have $3,000 to invest – money that you don’t need for short-term financial obligations and that you can leave in your portfolio for at least several years – here are two phenomenal growth stocks to consider.
1. Fiverr
Fiverr International (NYSE:FVRR) is experiencing a growth spurt as the freelance platform capitalizes on the way artificial intelligence (AI) is transforming the gig economy. One might wonder how a company focused on facilitating the relationship between buyers and sellers of professional services would fare amid the AI revolution.
Although it’s still early days, Fiverr’s efforts to refine its services so buyers can find the help they need and freelancers can respond to buyers’ changing needs appear to be paying off handsomely. The company has added a growing collection of AI-driven services over the last year. This includes not only new categories of AI-centric skills that freelancers can offer, but also the launch of services like Fiverr Neo, which uses AI to match buyers and sellers for projects.
Management estimates that AI has led to a 4% increase in business in 2024, noting that buyers are more focused on complex services than simple services. Buyers can be anyone from individuals to large corporations.
Complex services are those that require a person to deliver an end result, but where AI can help provide better efficiency. An example would be mobile app development.
Simple services include tasks such as translations or voice-over work, where Fiverr’s management estimates that the introduction of AI is more likely to see changes.
As Fiverr buyers focus more on complex services, these become a larger driver of the business, an important sign that the company does not need to rely too heavily on the growth of simple services. In fact, in 2023, about 32% of the platform’s gross merchandise value (GMV) came from complex services. GMV in complex services grew 29% in 2023, more than double the growth rate in 2022.
Looking back at 2023 as a whole, however, it can be seen that 23% of Fiverr’s GMV came from simple services. Not only do complex services account for a larger portion of GMV, but management has also found that the average transaction for complex services is about 30% higher.
Revenue rose 7% year-over-year to $361 million in 2023, and the company reported a profit in accordance with generally accepted accounting principles (GAAP). Net income was $3.7 million, compared to a net loss of $72 million in 2022.
Fiverr is also increasing its acceptance rate and spend per buyer increased 6% year-over-year at the end of last year. This business appears to be headed in the right direction, and investors should take note now.
2. Airbnb
Airbnb (NASDAQ:ABNB) continues to prove that the ongoing resurgence of travel is only part of its growth story. The company’s financials look great, the business is growing at a solid pace, and the growth compared to pre-pandemic days is even more impressive than last year’s figure.
Management is working to make hosting a stay on Airbnb as mainstream as booking a stay. Not only are travelers flocking to the platform, but the number of active listings is also increasing as more people recognize the income opportunity from listing homes.
At the end of 2023, the company had more than 5 million hosts worldwide. Active listings on the platform exceeded 7.7 million at year-end, an 18% increase from the same period last year and an all-time high for the company. Hosts earned nearly $60 billion in 2023.
Airbnb has continued to update its platform to increase the number of its hosts and guests. Easier pricing tools, long-stay discounts and improved payment options are just a few of the hundreds of improvements in recent years. Management said in the 2023 shareholder letter that host cancellations fell 36% in the final quarter of last year compared to the same period in 2022.
Both short-term and long-term bookings are important growth drivers for Airbnb. In the final quarter of 2023, long-stay stays (bookings of 28 days or more) accounted for 19% of gross nights booked on the platform. Now, around 25% of all long-stay stays last three months or longer, meaning people aren’t just using it for leisure travel.
Revenue was about $10 billion in 2023, up 18% from the previous year and 106% from four years ago. Profit for the 12-month period was around $5 billion, while free cash flow was just under $4 billion.
Airbnb benefits all types of travel spending and caters to travelers of all budgets and needs. With a profitable, liquid, and asset-light business, this stock seems like a clear buy right now.
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Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb and Fiverr International. The Motley Fool has a disclosure policy.
Do you have $3,000? Buying these two phenomenal growth stocks in 2024 would be a brilliant move. was originally published by The Motley Fool