It's no secret that 2023 was challenging for many. Consumers feel the squeeze of higher inflation and rising interest rates on loans, mortgages, and credit cards. But tough times make people stronger. According to a study by The Motley Fool, 82% of millennials and 74% of Gen Zers are planning financial resolutions for 2024.
Resolutions don't always need to reinvent the wheel. Sometimes, it's about just staying on track. My New Year's resolution is to buy more of these three great stocks I own. Want to know what they are? I got you.
1. SentinelOne
Cybersecurity could remain a recurring theme on Wall Street for the foreseeable future. According to the PSA Certified Security Report 2023, 75% of businesses have made security a bigger priority over the past 12 months, and spending is 15% higher than last year.
SentinelOne(NYSE: S) is among a new generation of advanced cybersecurity companies selling cutting-edge products that use artificial intelligence to find and eliminate threats before they cause problems. SentinelOne's designation as a leader in endpoint security by Gartner and other third parties highlights its product quality. Additionally, SentinelOne is expanding into other security markets, like cloud security, which grew at a triple-digit rate in the third quarter.
S Revenue (TTM) data by YCharts. TTM = trailing 12 months.
This growth is reflected in SentinelOne's total revenue, which has tripled over the past few years. Despite that success, the stock trades at just a fraction of what it once did. At a price-to-sales ratio (P/S) of 11 (down from over 90) and rapidly improving operating margins, SentinelOne continues to thrive and will remain on my buy list heading into next year.
2. Roku
Many investors today have grown up in the streaming era. Cable has taken a backseat to streaming services. Roku(NASDAQ: ROKU) was one of the early pioneers in streaming. Its dongles to turn televisions into streaming devices have evolved, and now the company is even building its TVs. Roku is still briskly picking up new users, including a 16% year-over-year bump in Q3, which puts the total at 75.8 million today.
Roku makes money from selling its streaming hardware, subscription fees, and ads off its user base. You can see below that growth stalled from mid-2022 to mid-2023 but has reaccelerated in recent quarters. Notice how low the share price is still despite Roku's reinvigorated growth and much larger revenue base than before.
ROKU Revenue (TTM) data by YCharts. TTM = trailing 12 months.
Streaming is still an ample opportunity over the coming years, both domestically and in international markets. Roku has expanded outside the U.S. and become the leading TV system in Mexico. Advertisers are still catching up as consumers cut the cord. According to a report by TVREV, ad spending on streaming will surpass broadcast TV by 2025 and could shift to nearly 70% by 2027. That sounds like continued growth ahead for companies like Roku.
3. Hims & Hers Health
Healthcare is an industry with so much opportunity, but taking advantage of it is hard because there are many moving parts, players, regulations, and competition. Hims & Hers Health(NYSE: HIMS) hasn't been around long (founded in late 2017), but it's seemingly cracked the code. The company offers telehealth consultations and prescribes custom treatments and over-the-counter products.
The company has racked up 1.4 million subscribers, which will do about $870 million in sales this year. Hims & Hers' revenue has roughly quadrupled over the past three years. The company is now also generating free cash flow. Management believes it will earn its first generally accepted accounting principles (GAAP) profit in the coming quarters. This is a business headed in the right direction, so it's mindboggling that the stock is only trading at a third of the price it used to.
HIMS Revenue (TTM) data by YCharts. TTM = trailing 12 months.
Healthcare is such a big industry that Hims & Hers could grow for a very long time if patients keep flocking to its brand. Hims & Hers is shifting from taboo niches like sexual health and hair loss to mainstream opportunities with substantial addressable markets.
Earlier this year, the company entered two significant categories in cardiovascular health and weight management. Shareholders should love how things are going, which will keep the stock on my shopping list.
Should you invest $1,000 in SentinelOne right now?
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Justin Pope has positions in Hims & Hers Health, Roku, and SentinelOne. The Motley Fool has positions in and recommends Roku. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
