2 top stocks I bet on doubling in 3 years

Top stocks with the potential to double in price within three years? This may sound like an ambitious goal at first. However, I think these options are more common now. Many stock market values ​​have fallen in the growth segment. Solid recovery potential alone may be sufficient.

AxonEnterprise (WKN: A2DPZU) and Etsy (NASDAQ:AAPL) are two top stocks I would most likely bet on for such a performance. Let’s take a closer look at why.

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Etsy: Top Stocks on Track to Double in 3 Years?

At Etsy, I believe the management of this top stock is business-oriented and long-term, laying the foundation for future success. For example, it recently announced that it would set aside $25 million for sales where something goes wrong and for which buyers or sellers must be compensated. It is true that it will have a negative impact on earnings in the short term. But: It promotes trust in this practice.

There have been several such things in the past. For example, investment in marketing, which already paid off during the pandemic. With that mindset and approach, Etsy’s management has transformed from a niche player to a more established e-commerce player. But where is the potential to double the price within three years?

My thesis: At Etsy, there may still be isolated areas of stagnation. Now inflation is weighing on too, clouding consumer interest. But sooner or later, customers are likely to buy more again, which will bring growth. The total market could eventually top $1.7 trillion. Meanwhile, Reverb, Elo7 and Depop are also developing and contributing more significantly to growth. With more growth, this stock, with a price-to-sales ratio of around 6 and a 2021 price-to-earnings ratio of 30.6, could well become a moderate and profitable top growth stock in three years, doubling its market value.

Axon Enterprise: There is no shortage of profitable growth!

For me, another top stock that could double in price within three years is Axon Enterprise. Long story short, there is no shortage of profitable growth, which can be a very important catalyst. The second quarter ended with revenue rising 31% to $286 million. With cloud and software revenue growing 41%.

The net result also speaks for a doubling of the price if the medium-term trend continues. In the second quarter, the figure was 0.71 dollars per share. Profitable growth acts as a catalyst. If management also targets a market reportedly worth $52 billion, there’s still plenty of potential. Possibly within the next three years.

For top stock Axon Enterprise, cloud revenues are also particularly important because of their recurring, high-margin nature. With a price-to-sales (P/S) ratio of around 8, I also see the potential here due to the solid growth that the stock may tend to double in price. At least if this continues. Within three years, the price-to-value ratio may finally fall below 4 at constant growth rates.

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Vincent owns shares in Axon Enterprise and Etsy. The Motley Fool owns stock in and recommends Axon Enterprise and Etsy.

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