Various passing trends can generate profits for certain businesses but often end up being short-lived fashions that do not justify the investment of individuals with a focus on long-term goals. Companies that consistently provide substantial profits over an extended period usually excel in sectors that are stable and likely to remain relevant for the foreseeable future. Fiverr ( FVRR 1.12% ) and Airbnb ( ABNB 0.38% ) While these two stocks have not shown significant growth in the stock market this year, they have the potential to deliver impressive returns over a period of five years or longer.
1. Fiverr
Fiverr is a platform where freelancers can showcase their services and connect with businesses looking to hire them. Creating a website from the ground up can be time-consuming and complex, making Fiverr a more appealing choice for numerous freelancers. Businesses find value in accessing a wide range of freelancers, complete with portfolios and client feedback, all conveniently located in one platform.
All parties benefit, including Fiverr. Although the company’s revenue growth has slowed down, it has managed to become profitable by significantly reducing expenses.
During the second quarter In comparison to the previous year, Fiverr’s revenue increased by 6% to $94.7 million. The net income per share rose from $0.01 in the second quarter of 2023 to $0.08 this time.
Fiverr revealed its acquisition of AutoDS, a business focusing on drop-shipping services. The specific financial terms of the deal were not made public by the two companies. This strategic action allows Fiverr to tap into a fresh stream of regular subscription income in a sector estimated to be valued at $226 billion in 2022.
Furthermore, the company is presented with an additional avenue for growth through the increasing popularity of drop-shipping. Additionally, the company’s primary business stands to gain from a significant boost due to the expansion of the market. gig economy Workers appreciate the freedom it provides. Some individuals require extra earnings from a supplementary job. Regardless of the motivation, experts anticipate that the gig economy will keep growing.
Fiverr is benefiting from the growing use of artificial intelligence as companies are using its platform to recruit specialists in this area. The company predicts that the market potential is around $247 billion, even before considering the impact of incorporating AutoDS into its operations.
Despite experiencing a notable decrease in its share price over the last three years, Fiverr continues to be a strong investment option for long-term holding.
2. Airbnb
Airbnb is a prominent company that offers lodging and activities for travelers. Their platform includes over 5 million hosts across numerous countries globally.
Despite facing challenges during the pandemic, Airbnb has managed to recover and become even more successful. Its revenue has been increasing steadily, and the company is now consistently making a profit.
During the initial quarter, Airbnb experienced an 18% increase in revenue compared to the previous year, reaching $2.1 billion. The company’s net income also saw a significant rise of 126% compared to the same period last year, making it Airbnb’s most profitable first quarter to date. Additionally, important indicators such as the number of nights and experiences booked, as well as free cash flow, showed positive growth trends.
How does the future outlook of Airbnb appear? It is expected that the company will continue to thrive in the coming years, as long as there is a continued interest in travel among people.
One of Airbnb’s areas for expansion is long-term accommodation. The company experienced a 25% increase in stays lasting three months or longer compared to the previous year in the first quarter. This trend is attributed, in part, to the rise of the gig economy, where freelancers often combine work with travel.
People traveling for more than three months typically find it more advantageous to opt for accommodation in a private home because it provides benefits like privacy and amenities that may be lacking in a hotel.
Artificial intelligence (AI) could contribute significantly to Airbnb’s expansion. The company is developing an AI-driven virtual assistant. It recently purchased GamePlanner.AI to support this project. By effectively implementing AI technology, Airbnb may lower expenses and enhance operational efficiency and profitability in the future.
It is important to mention that Airbnb’s business also gains advantages from this. network effect Increasing the number of hosts on Airbnb’s platform will lead to a greater influx of guests, and vice versa. This advantage is expected to help Airbnb maintain its position as a dominant player in the industry and provide strong returns for long-term investors.
