Shopify, PDD, and Carvana are positioned for significant growth in the coming years.
With the market nearing its historical peaks, transitioning from high-growth equities to more conservative value investments might seem wise. While this strategy could be prudent, investors who quickly abandon all growth stocks may overlook considerable long-term opportunities.
Rather than shunning growth stocks altogether, investors should concentrate on those capable of sustaining their increasing valuations and have multiple avenues for expansion. The following three stocks exemplify this approach: Shopify (SHOP 1.48%), PDD (PDD -0.36%), and Carvana (CVNA 1.51%).
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Shopify
Shopify’s e-commerce platform provides merchants the tools necessary to launch their own online stores, handle payments, fulfill orders, and manage marketing campaigns. This integrated solution attracts merchants who prefer not to use larger marketplaces like Amazon. Additionally, it has gained traction with larger merchants via its Shopify Plus service.
Shopify connects its merchants with its Shop Pay for digital payments, its Shopify Capital for financial loans, and its consumer-facing Shop app. Merchants can also utilize Amazon’s fulfillment network through integrated “Buy with Prime” features.
Although Shopify’s growth surged during the pandemic, it has since moderated. However, it became profitable again in 2023 following the divestment of its logistics arm and cost-cutting measures. By 2024, its earnings per share (EPS) increased by 50% as it expanded higher-margin subscription services while continuing to trim expenses.
PDD
PDD stands as China’s third-largest e-commerce company, positioned after Alibaba and JD.com. It has successfully established itself as a discount marketplace catering to lower-income consumers in China’s smaller cities while also launching an online agricultural platform enabling farmers to sell directly to customers. Furthermore, it has ventured internationally with Temu, connecting Chinese merchants to markets in the U.S. and beyond.
PDD has seen considerably faster growth than its counterparts, gaining traction in China’s urban centers while Temu expands globally. Stricter antitrust measures imposed on Alibaba in 2021 have further facilitated PDD and similar competitors’ growth.
Carvana
Carvana operates as an online marketplace specializing in used cars, challenging traditional dealerships with its simplified buying experience. Customers can finish the purchasing process online without negotiating with dealers, receiving cars delivered to their homes or picking them up from its unique “vending machine” towers.
During 2020 and 2021, Carvana’s sales boomed due to the pandemic-induced disruption in new car production, which drove consumers towards online used vehicle purchases. But in 2022 and 2023, auto sales declined due to rising interest rates.
However, in 2024, Carvana’s unit sales jumped 33% as interest rates fell and the used car market began to recover, benefitting from its acquisition of the online auction site ADESA and an increase in monthly unique visitors. Analysts project revenue and adjusted EBITDA growth rates of 25% and 33%, respectively, from 2024 to 2027, signaling a bright future for this stock, which currently trades at 24 times this year’s adjusted EBITDA.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is also on the board. Leo Sun holds positions in Amazon and Meta Platforms. The Motley Fool has investments in and recommends Amazon, Meta Platforms, and Shopify, while also recommending Alibaba Group and JD.com. For further details, please refer to The Motley Fool’s disclosure policy.
