Behind the ongoing rally on Wall Street where leading indices reached their new historical summit series, young investors who were new to the stock market were largely using free apps such as Robinhood.
Considering that the Millennium and Gen Z generations together account for more than 50% of the US population, this new group of individual investors is a force that cannot be ignored.
In this article, we will examine three innovative stocks that are very popular with millennium and generation Z investors. All three names have the potential to disrupt the industries they belong to in the coming years and are powerful options for the long term.
1. Chewy: The US’s Largest Online Pet Products Seller
Chewy (NYSE: CHWY) attracts young investors for two reasons: teens love to shop online and have pets.
Shares of the company, which made its first public offering in June 2019, gained almost 290% value in the last 12 months, as the increase in pet feeding rate increased the demand for products in this field during the corona virus-induced restrictions.
According to the American Pet Products Association, 67% of US households currently own pets. If we take a closer look, the millennium and the Z group constitute the largest pet owner segment on the basis of generation distribution, and this trend will continue to grow in the coming years.
The CHWY share, which reached a historic high of $ 115.23 on January 15, closed yesterday at $ 101.76, giving the Dania Beach, Florida-based e-commerce company a market value of $ 42.8 billion.
As a sign of how well Chewy has performed over the past year, the company has managed to surpass sales expectations in its revenue reports published every quarter of 2020.
The company, which provides consumers with a variety of food products for different animals through its website and mobile app, and delivers door-to-door delivery, will continue to show strong performance in the coming months, with the expected jump in pet spending in the US.
Chewy will publish its final quarterly report on Tuesday, March 9, after the market close.
The consensus forecast is for a loss of 10 cents in the fourth quarter, compared to a loss of 15 cents per share in the same period last year. Revenue is expected to reach $ 1.95 billion, up 45% year over year, driven by the growth in demand for the Autoship service offered by the company. The Autoship service allows consumers to save money by making a repeat product order. The service also provides the company with a future-oriented revenue stream.
Apart from these figures, investors will be closely monitoring the update to see if Chewy’s active user account number can maintain its current growth rate.
After breaking a record by gaining 1.2 million net new consumers in the third quarter, the company has a total of 17.8 million active users, an increase of nearly 40% compared to the same period last year.
2.Farfetch: Popular Online Luxury Clothing Sales Platform
Farfetch (NYSE: FTCH) is a rapidly growing retail sales platform that sells products to some 1,300 of the world’s most popular brands, boutiques and stores. According to the e-commerce company, about two-thirds of its customers are from the millennium, or Z-generation.
FTCH share, which started to be traded on the New York Stock Exchange in September 2018, increased its value by more than four times, recording a 516% increase as consumers worldwide showed great interest in the company’s online shopping platform during the corona virus bans.
The shares closed yesterday at $ 62.93, close to the $ 65.54 historical peak they reached on December 22, and gave the London-based company a market value of about $ 21.2 billion.
Despite the massive rise in the share price, Farfetch is increasingly strengthening its status as the leader of the online fashion industry and is ready to continue its rise, thanks to its popularity among young fashion-conscious young consumers.
The company’s announcement that it will form a partnership with Chinese e-commerce giant Alibaba (NYSE: BABA) to accelerate its expansion into China is another promising development with the Asian country rapidly becoming the world’s largest market for luxury goods.
Farfetch, benefiting from the COVID-19 epidemic shifting luxury consumption from traditional stores to online platforms, announced strong results in its third quarter report published on November 12.
Revenue reached $ 437.7 million with an increase of 71% compared to the same period last year, far above the expectations of $ 365.5 million. The total transaction volume on the platform increased by 62% year over year.
The company is preparing to release its fourth quarter results after the market close on Thursday, February 25. The consensus forecast is for revenue to reach $ 516.4 million, up 35% from last year, with a loss of 13 cents per share.
3.Roku: Fast Growing Video Streaming Platform Provider
Roku (NASDAQ: ROKU), which achieved a significant increase in the number of users and increased advertising revenues, especially between the millennium and the Z generation, became one of the best performing names in the market.
ROKU’s share, which gained 375% value in 2019, more than doubled its value to 165% in 2020 and has already increased 7% in the first month of 2021.
Despite high gains in the last 24 months, we expect ROKU shares to continue to climb in the new year.
Shares closed yesterday at $ 418.75, near the record high of $ 448.17 on January 22. At current levels, the San Jose, California-based company has a market value of approximately $ 55 billion.
Roku was able to surpass Wall Street’s profit and revenue expectations quarter after quarter, thanks to strong growth in ad-supported, video-on-demand services.
The video platform will release its latest financial results after the market close on Thursday, February 11th.
The consensus expectation is that the loss per share in the fourth quarter will decrease to 6 cents compared to 13 cents in the same period last year. Revenue is expected to reach $ 613.5 million, up 49% year on year.
In addition to these figures, investors will also closely monitor Roku’s active user accounts and average revenue per user (ARPU) metrics.
Roku’s active user accounts reached 46 million as of the third quarter, up 43% year-on-year, while the average revenue per user increased 20% from last year to $ 27.