A new year brings new goals and new investments. So, which stocks are the best to purchase in January 2025? Read on for three stocks we believe you should consider this year.
Airbnb
Few businesses have been as successful as Airbnb at upending an entire sector. As the name suggests, the firm began as a few air mattresses on the floor of the co-founders’ apartments in 2007. Since then, it has grown to the point where it has altered millions of people’s perception of travel lodgings.
The stats on Airbnb are rather astounding: over 5 million hosts list over 8 million properties and experiences on the marketplace. More than 125 million nights and experiences were reserved on Airbnb’s platform in the most recent quarter alone, totalling $21.2 billion in booking value—a 12% increase from the previous year.
In addition to being enormous and expanding quickly, Airbnb is also quite profitable. Over the last four quarters, it has produced $4.3 billion in free cash flow (FCF) and maintained a 41% FCF margin. With over $11 billion in cash and short-term investments on its balance sheet, Airbnb still has much room to develop. Its total market potential, including experiences and long-term and short-term stays, is expected to be trillions of dollars.
PayPal
At its peak, PayPal was a cash machine but has since fallen around 75%. The primary cause of PayPal’s downfall is that investors were let down when the company’s growth suddenly slowed in 2022, and management acknowledged that its prior user growth goals were not achievable. Growth slowed in 2023, and it’s unclear how the company will develop.
Investors should be aware, nevertheless, that this is still a robust and highly successful company. Additionally, PayPal’s management staff has undergone a total restructuring. Its C-suite is a fantastic ensemble, with each member new to the company. The new executives are already taking significant actions, such as introducing an advertising platform and a cash-back debit card offering that leads the industry.
Between PayPal and Venmo, the company has 429 million active customers and handles over $1.6 trillion in annualised payments. As management believes it is inexpensive, the corporation has been actively repurchasing its stock, using approximately $5 billion in free cash flow each year.
Shopify
Shopify is a platform that enables companies of all sizes to sell their goods online, emphasising helping smaller companies and expanding with them by building enduring partnerships. Shopify provides businesses with a subscription plan that starts at $39 per month (even less for one-person merchants) and several ancillary services that make business operations easier, like logistics and payment processing solutions.
Shopify has become a behemoth thanks to its “one-stop shop” strategy for facilitating e-commerce. More e-commerce sales are passing via its network than any other company save Amazon. But Shopify might only be getting started. It appears to have fantastic long-term potential, and the stock price is still well below the peak of the most recent market decline brought on by recession concerns and indications of a slowdown in consumer spending, making January 2025 a great oppertunity.
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