What do a major fintech player, mobile communications company, and major supplier have in common with the bioprocessing industry?
These industries PayPal (NASDAQ: PYPL), Digital turbine (NASDAQ: APPS), and Repligen (NASDAQ: RGEN), and they have all gained ground in the midst of the pandemic – and in the long run, they have all grown to become major players in their respective fields. These strong core companies are riding structural tails, and are looking to become a buying and holding jewel for the long haul.
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1. PayPal
The pandemic accelerated the growth of e-commerce and digital payments in 2020, which gave PayPal a major boost. The company created 72.7 million net new accounts in 2020, with total payroll volume (TPV) rising 31% to $ 936 billion, driving revenues up 21% to $ 21.5 billion. Net revenue also rose 71% to $ 4.2 billion, while free cash flow rose 48% to $ 5 billion. With the company planning TPV growth in the high 20% range and revenue growth of 19% for 2021, its future looks bright.
Going beyond its core online payment business, the fintech director has launched several cashless payment features for in-house purchases including tap-and-pay, payment cards, and QR codes. Currently, more than 600,000 sellers accept PayPal payment options. With buyers receiving a double-digit increase in average basket size from customers using QR codes, expect more sellers to begin accepting them. In 2020, nearly 10 million customers used PayPal services to make inbound purchases worth more than $ 20 billion. Managers have predicted that the in-store retail purchase market will be worth $ 8 trillion by 2025.
In 2020, PayPal introduced features such as “buy now and pay later,” bill payment, direct deposits, and cashing analysis to the PayPal and Venmo wallets. The “buy now and pay later” option has already been used by 3 million customers and accounted for $ 750 million of TPV in the first full quarter after its launch. The company also allows individuals to buy, sell and hold cryptocurrencies through their PayPal accounts – and plans to allow them to use cryptocurrencies to make purchases at their 29 million buyers this year .
PayPal stock has already gained over 140% in the last year. However, this is a rocky global growth story that may continue to reward investors for many years to come.
2. digital turbine
Digital Turbine acts as an intermediary between advertisers, original Android device manufacturers (OEMs), and mobile operators. It helps advertisers install their apps on partner OEMs’ phones and carrier networks, either by downloading them to new devices or by recommending them to users based on the Their special interests. The company’s Single Tap technology has further enhanced the opportunities for users to download the recommended apps.
Digital Turbine has already rolled out its flagship software platform, DT Ignite, to more than 570 million mobile devices. In its third fiscal quarter of 2021, which ended Dec. 31, the company added 65 million machines, a year-over-year increase of more than 50%. Most of this growth came from international markets, but some were offset by the 5G update cycle in the US These tails will continue to drive its growth.
Digital Turbine’s targeted advertising strategy has led to higher user engagement and better return on investment for advertisers. The company’s revenue per device rose year-over-year by more than 25% in the U.S. and more than 65% in international markets in its third fiscal quarter. Network effects have also created a strong ditch. In addition to the revenue from application media (from DT Ignite and Single Tap), the company’s content media products have multiplied their revenue base and increased margins.
In its fiscal Q3, Digital Turbine’s revenue jumped 150% year-over-year to $ 88.6 million. Nearly half of that money comes back naturally, mostly coming from the content media industry. The company’s adjusted net income increased year-over-year 300% to $ 20 million. It also has a strong balance sheet with $ 43.7 million in cash and $ 19 million in debt.
Digital Turbine is currently trading at a forward multi-price-to-earnings of 88.7, which is rich. However, with the company entering less than 16% of the 3.6 billion smartphone user base, there is still much room for growth. This is a multi-faceted opportunity and investors can reap huge returns from this stock, even if they invest in it at these elevated rates.
3. Repligen
Repligen provides technology, systems, and consumable products to the bioprocessing industry. The company has grown to become a major player in pre-packaged filtration and chromatography – processes used to clean and improve biological production during bioprocessing. Repligen has recently entered the field of process analysis, developing technologies that take real-time measurements of proteins, plasma DNA, and nucleic acids while bioprocessing is in progress.
The rapid pace of clinical development and commercial-scale production of biology, gene therapies, and cell therapies, as well as COVID-19 vaccines and therapeutic therapy, has significantly increased demand for bioprocessing. Repligen has estimated that its total address market is worth $ 3.7 billion, which is only part of the $ 12 billion global bioprocessing market.
The company’s offerings are well-suited for single-use type manufacturing and continuous manufacturing, two key trends that are poised to make bioprocessing more flexible, more prone to contamination, and more productive. The company is prioritizing capacity expansion and an increase in gene therapy biopsy in 2021.
In 2020, Repligen’s revenue rose 36% to $ 366 million. Its total margin was 57.6%, and the adjusted EBITDA margin was 29.4%. For 2021, regulation now leads for 37% to 43% year-over-year growth over revenue, 57% to 58% full margin, and 30% to 31% adjusted EBITDA margin.
Trading at multi-P / E forward of over 91, the stock is not cheap. Repligen also competes with such great players Danaher (NYSE: DHR), MilliporeSigma, and Thermo Fisher (NYSE: TMO). However, despite the competitive pressures, Repligen has made its mark. With a market capitalization of just over $ 11 billion, this high-growth company could be an attractive target in the coming years. The stock has gained more than 130% last year, and has the potential to rise higher in the next decade.
This article represents the opinion of the writer, who may not agree with the “official” recommendation position of the Motley Fool chief consulting service. We are motley! Questioning an investment dissertation – even one of our own – helps us to think critically about investing and make decisions that will help us become softer, happier and richer.