Now is a great time to look for the next trillion-dollar companies. With monetary policymakers from across the globe landing in Sintra, Portugal, for 2023’s ECB Forum on Central Banking, to say this week is significant for the economic realm would be an understatement. This year, the forum is centered on “Macroeconomic Stabilization in a Volatile Inflation Environment,” and it can be expected that price stability amid rate hikes and changing energy markets will be a pressing topic of debate.
Of course, such issues regarding inflation are subject to change–especially as the Commerce Department plans to release this month’s PCE price index on Friday. This publication, shedding further light on the efficacy of the Fed’s rate hikes, will prove useful for investors interested in high-growth stocks, which have historically performed better in lower-inflation periods. If so, an upsurge in the performance of tech giants could be expected, particularly those getting involved with the current AI fad. As this decision unfolds, these three stocks are innovating their respective industries while maintaining superb financials. High activity in acquisitions and partnerships further serves as a staple for strong management capabilities.
Next Trillion-Dollar Companies: Model N Incorporated (MODN)
Model N Incorporated (NYSE:MODN) is a leading cloud revenue management company that aids life sciences and high-tech companies to achieve growth, optimize operations, and proactively mitigate risks through its comprehensive suite of solutions.
MODN stock is up 36.97% in the past year, with nine analysts forecasting a median price increase of 25.69% over the next 12 months or a median price of $43 and a high price prediction of $52.
The global revenue management software market is valued at $17.71 billion as of 2022 and is expected to grow at a 13.1% CAGR to $37.10 billion by 2028. The market has seen significant development driven by the increasing use of membership-based business models across industries. As organizations focus on the foundation of steady and lasting income, there will always be an increased demand for such solutions.
Since 2011, Model N has been a highly profitable company, boasting an average TTM revenue growth of 13.87% and generating an FY22 revenue of $219.16 million. Its extraordinary profitability is further evident in its forward ROE growth of 49.74%, outperforming competitors in the sector whose average ROE is mere -3.33%. These impressive financial indicators reflect Model N’s consistent success, strong market position, and ability to deliver notable returns to its shareholders.
A top growth catalyst for Model N is its recent new partnership with a top partner relationship management software provider, Impartner. This partnership now allows high-tech companies to streamline and optimize every aspect of their indirect sales motions by integrating both platforms, providing a unified channel and revenue management solution that enhances operational processes and addresses industry pain points.
MODN stock presents an exceptional investment opportunity, as its strong financials and recent partnership provide unique advantages that set it apart from competitors. Thus, Model N is a great candidate among the next trillion-dollar companies.
CrowdStrike Holdings (CRWD)
CrowdStrike Holdings (NASDAQ:CRWD) is a globally leading cybersecurity company focused on its pioneering platform built to constantly adapt to new technologies, CrowdStrike Falcon. Its Security Cloud is able to process trillions of cybersecurity events every week, providing large amounts of data that become a powerful competitive advantage that scales as more data is fed into the Falcon platform.
The cybersecurity market is projected to grow at a CAGR of 15.84%, from $5.20 billion in 2022 to $12.56 billion by 2028. This is due to evolving AI technologies, which are pivotal in preventing cybersecurity breaches.
CRWD stock has grown 40.85% in the last six months due to AI advancements and strong Q1 financials. The company’s non-GAAP EPS of $0.57 beat consensus by $0.07, revenue of $692.58 million experienced 42% YoY growth, beating consensus by $16.35 million, and net-new ARR increased by $174 million.
CrowdStrike has a unique position in the AI cybersecurity realm as it can leverage the enormous amount of data processable by its platform. CrowdStrike’s ability to input these datasets into language models is a powerful competitive advantage that beats out other cybersecurity vendors who do not have the extent of data that CrowdStrike does. This leads to the company’s biggest growth catalyst, Charlotte AI, which leverages its immense dataset advantage to train a powerful AI to produce faster results and better security outcomes, all at a lower cost. In tandem with CrowdStrike’s unique continuous human feedback loop with its OverWatch, Falcon Complete, and Intel teams, no other vendor can match this approach to generative AI.
Yahoo Finance reports 42 analysts with a mean 1-year target price of $177.40, spanning as low as $128.00 and as high as $235.00. Many notable firms have rated CRWD as a “Buy,” with no downgrades. CrowdStrike’s unique dataset and continuous feedback loop that culminates in its Charlotte AI product offering is an unmatched competitive advantage from any cybersecurity vendor, reinforcing the “Buy” rating. This makes it a great bet among the next trillion-dollar companies.
Viasat (VSAT)
Viasat (NYSE:VSAT) is an American telecommunications company specializing in satellite internet service. Viasat has an extensive range of services and customers, from consumer services for citizens to industrial services for the U.S. Department of Defense.
The global telecommunications market was valued at $1.8 trillion in 2022 and is forecasted to grow at a 6.2% CAGR by 2030 to $2.5 trillion. There is an increasing demand for connectivity within growing businesses, communities, and households. Additionally, advancements in network speed, such as 5G, all serve as factors for growth in the telecommunication market.
Viasat’s financials are faring well, with a reasonable 42.4% Net Income Margin (TTM) beating its sector median over 20 times, 24.3% Q1 revenue growth rate beating analyst expectations by $11.3 million, and a ROTA of 14% with a $367.6 million cash from operations over the past twelve months, well past sector medians.
Viasat also has a plethora of growth catalysts, for the company has also recently launched its newest generation of satellite, ViaSat-3. The ViaSat-3 will be able to deliver coverage to America, Europe, Africa, the Middle East, and Asia at download speeds exceeding 100 Mbps while weighing only 6 tons. It is additionally lighter and has greater coverage than the previous generation. Through this launch, Viasat expands its international customer base to civilians and other governments through improved telecommunication services.
Furthermore, leadership completed its recent acquisition of British telecommunication company Inmarsat. This acquisition helps with expanding its European citizen customer base and allows for taking on existing contracts Inmarsat had with the European Government to ultimately drive revenue.
Lastly, VSAT stock is up 22.4% YTD and has an average predicted twelve-month 44.8% upside from analysts. With its positive outlook, healthy financials, a new satellite launch, and acquisitions, VSAT stock is a worthwhile addition to investor portfolios. This is why Viasat is among the best candidates regarding the next trillion-dollar companies in my book.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
