2 monster growth stocks outperformed the bear market this year
As the second half of 2022 kicks off, investors are hoping for a more steady rally in the stock market than the past six months. High inflation has wreaked havoc on the economy, and since high interest rates are the cure, people are feeling the pinch on multiple fronts.
However, there are some early signs that these pressures are abating, with prices of some commodities quickly reversing from all-time highs. However, the tech sector is being hit hard right now, with Nasdaq 100 The index traded in a bear market after losing more than 27% since the beginning of the year.
But there are two tech companies that are overwhelmingly pessimistic, and they are well positioned to continue to outperform for the rest of the year.
Duolingo (DUOL -14.34%) A global leader in the emerging digital language education industry, it was among the very few technology stocks to appear green in 2022 until an analyst’s note of its positive return slipped into negative on Monday. However, its 11% year-to-date decline far outperforms the Nasdaq 100 at this point in the year.
Duolingo has had success by reimagining the educational experience, taking a mobile-first approach and making games into its platform so that it doesn’t appear to be learning and more like entertainment. Introduced a paid subscription option in 2018 for users who want to unlock additional features, and quickly climbed the ranking to become the highest-grossing educational app in the alphabetPlay Store, the second highest store in appleApp Store for .
Duolingo has collected 49.2 million monthly active users, of which 2.9 million are now paying a subscription fee. The latter figure grew by 60% in the first quarter of 2022 compared to the same period the previous year, and it is constantly increasing each year as a percentage of active users. It’s an indication that users are drawing significant value from the Duolingo platform, and given that the company continues to add new languages and integrate features backed by advanced tools like artificial intelligence, it’s no surprise.
Duolingo estimates that it will generate $353 million in revenue through 2022, which would be a 41% jump over results in 2021. The company is targeting an address market of 1.8 billion foreign language learners worldwide, and since the app has only been downloaded around 500 million times So far, he still has plenty of runway to grow.
2. It can be defended
Cybersecurity is one of the major expenses that the corporate world will not concede right now, even in difficult economic conditions. At least that’s the indicator from multiple surveys of corporate leaders over the past 12 months. The threat landscape continues to become more dangerous as organizations shift a greater percentage of their operations online, leaving them vulnerable to attacks from anywhere in the world.
defensible (TENB -1.02%) It leads the cybersecurity industry in managing vulnerabilities and threat detection, and is experiencing robust growth as companies adopt more advanced tools that can proactively search for and eliminate risks before they cause costly damage. Tenable’s Nessus platform is ranked first in terms of adoption, serving 30,000 organizations with more than 2 million individual downloads, and it tops the rankings in accuracy and coverage, and protects against more common vulnerabilities and exposures (CVEs) than any of its competitors.
The company grew its annual revenue at a compound rate of 34% between 2016 and 2021, and could generate up to $679 million in 2022, according to its guidance. That would represent a slight slowdown in growth to 25%, though as the revenue numbers grow further, it becomes difficult to sustain higher rates of increase.
But more importantly, Tenable’s biggest customer is driving much of the company’s growth. The number of organizations spending $100,000 a year (or more) with Tenable swelled from 124 in 2016 to 1,095 in 2021, at a compound annual growth rate of 54%. The increase continued in the first quarter of 2022 as it added another 17. It highlights the growing focus on cyber security at the big end of the corporate sector.
The viable stock is down 7% in 2022, but still crushes the Nasdaq 100. Remarkably, none of the 15 Wall Street analysts covering Tenable recommended selling it, which speaks volumes for future demand forecasts for advanced cybersecurity tools. .
Susan Fry, CEO of Alphabet, is on the board of The Motley Fool. Anthony Di Pizzo has no position in any of the stocks mentioned. Motley Fool has and recommends positions at Alphabet (A shares), Alphabet (C shares), and Apple. Motley Fool recommends the following options: long calls in March 2023 worth $120 on Apple and short calls in March 2023 worth $130 on Apple. Motley Fool has a disclosure policy.