Technology is evolving at a rapid pace, and we’re quickly approaching a future where everything from our daily commutes to going to the doctor will be completely revolutionized.
For smart investors, identifying those businesses that are disrupting their industries and ushering in the future can lead to huge returns.
Identifying these companies isn’t always easy, but here are two such companies that are primed for massive growth in the years to come.
Teladoc Health (NYSE: TDOC)
In the last 25 years, the internet has had a massive impact on daily life. From email, to online shopping, to social media, it has changed the way we work, the way we buy, the way we play, and even the way we date.
Now, it’s no secret that the U.S. healthcare system is ripe for disruption, and Teladoc (NYSE: TDOC) aims to bring physician checkups online.
The company is a telemedicine pioneer and uses videoconferencing technology to connect patients with on-demand remote medical professionals. Patients can connect with doctors on non-emergency issues like sinus infections, allergy issues, and bronchitis, while doctors can refer patients to specialists, and write prescriptions for non-controlled medications.
And this service is definitely meeting a need as evidenced by its strong growth. In 2014, it facilitated nearly 300,000 remote appointments. By 2016, that number jumped to 950,000.
In its most recent quarter, Teladoc posted 62% revenue growth at $111 million, and the company is targeting 55% top-line growth to a range of between $119 million to $121 million this quarter. And its growth opportunity internationally may be even greater as revenue in this segment almost tripled to $24 million in its most recent quarter.
The company continues to post losses, but that should be seen as a sign of the tremendous long-term growth opportunity the management sees on the horizon. About half of Teladoc’s revenue is spent on sales and marketing as the company invests in growth now to capture market share and cement its leading position in the telemedicine industry before focusing on profit later on.
And the opportunity in the telehealth market is considerable. According to a Transparency Market Research report, the global telemedicine industry will hit sales of $19.5 billion by 2025, and Teladoc is well positioned to dominate in this growing sector.
The average analyst price target for TDOC is $84.83, suggesting possible upside of 39% over the next twelve months. Chardan Capital recently boosted its price target for the stock to $100 – nearly 64% above Thursday’s closing price.
Aptiv (NYSE: APTV)
Driverless technology is coming, but what remains to be seen is which companies will see the biggest benefit—and thus, which companies will reward investors over the long haul—as the technology develops and is adopted into the mainstream.
But for those investors looking for stocks with exposure to the sector that are poised for massive growth, Aptiv (NYSE: APTV) is worth a look.
Aptiv designs and manufactures vehicle components that provide power, data, and software to driverless vehicles. Thus, the company builds the brain and nervous system for these advanced vehicles.
While we’re a ways off from driverless technology becoming fully adopted, the company is already making big advances in developing the technology and has logged more than a million autonomous miles globally, with vehicles reaching more than 1,600 destinations in Las Vegas through a partnership with Lyft.
And that partnership has proven something that’s incredibly significant: people are both willing to try the technology, and pay for autonomous rides. Management notes that this program in Las Vegas has already resulted in more than 25,000 paid autonomous rides.
Driverless technology is going to completely change the way people commute on a daily basis, and could also disrupt car ownership, trucking, and will improve traffic safety. And the companies that drive the revolution could see incredible returns in the years to come.
Intel and research firm Strategy Analytics predict that the “Passenger Economy” will be a $7 trillion market annually by 2050. They estimate there will be 51,000 driverless cars sold worldwide by 2021, with that number exploding to 33 million by 2040.
It’s clear that driverless vehicles will be the way of the future, and if Aptiv continues to deliver the brains behind the technology, it could see incredible growth over the next decade and then some.
Analysts’ average twelve month price target for the stock is $100.20, indicating possible upside of 39.52%. Robert W. Baird rates the stock a Buy with a price target of $115 – 60% higher than the current price.