Robinhood is a popular trading platform that often serves as a barometer of what is hot and what is not on the markets. Shares that are most popular on Robinhood come from a variety of industry and risk levels, but most are primed for serious growth.
However, there are a few surprising omissions from the Robinhood Top 100, a continuously updated list of the most popular stocks on the platform. Teladoc Health (NYSE: TDOC) en Shopify (NYSE: STORE) are two high-growth stocks that I would expect to be popular among Robinhood investors, especially since both companies have doubled their sales over the past two years and Robinhood has a large millennial audience that follows growing companies.
1. Teladoc
Teladoc Health is currently the 212nd most popular stock on the platform, according to Robintrack, which tracks the popularity of shares on Robinhood. That’s a surprise considering the success of the virtual health platform this year – its share price is more than 120% year-to-date. Teladoc’s service allows patients with or without insurance to access a doctor via virtual visits, which is why demand has risen in the midst of the COVID-19 pandemic, as people hide at home and avoid personal trips to the doctor’s office.
Image Source: Getty Images.
Teladoc recently released its second-quarter issue, reporting 85% year-over-year sales growth for the three-month period ending June 30. The number of virtual visits performed through the platform grew from 908 million in the year-ago to almost 2.8 billion, an incredible increase of 203%. There is still a lot of room for the company to grow, especially as COVID-19 remains a serious public concern. The challenge for Teladoc is to continue to grow at more than 80% year-on-year. While that growth rate is unlikely to be sustainable in the long run, it is not unreasonable for double-digit growth to continue indefinitely given the pandemic and the desire of patients to minimize unnecessary travel.
The company also made headlines this summer. On August 5, Teladoc announced its planned merger with $ 18.5 billion Livongo Health, which is sure to drive even more growth in the future. Livongo, who runs at # 178 on Robinhood and ahead of Teladoc, focuses on treating people with chronic conditions, specifically diabetes. Through their network of devices, patients have the opportunity to share their glucose readings with family members and health coaches. The deal expands Teladoc’s reach to shape patients’ normal health habits and opens up a new consumer base. The merger is still subject to shareholder approval, but companies expect the transaction to close by the fourth quarter.
Teladoc has had a banner year thanks to the stay-at-home orders required by the release of COVID-19. But even as these orders dropped, the demand for telehealth services could remain strong as people move towards social distance. Favorable coverage for private and public compensation and consumer satisfaction with the convenience of virtual non-proprietary designations should also encourage future use. Market research firm Global Market Insights expects the telemedicine market to grow at a compound annual growth rate (CAGR) of 19.3% by 2026, when it will reach a value of more than $ 175 billion. That’s up from $ 45 billion in 2019.
Potential growth of business and industry is good news for investors. Teladoc is an already successful stock that is ready to shoot even higher.
2. Shopify
Shopify rings in at 118 on Robintrack, narrowly missing the Top 100. The Canadian e-commerce company is also experiencing an increase in demand, benefiting more people who stay at home and buy goods through their platform. Shopify’s second-quarter results for the period ending June 30 show an unbelievable 97% year-over-year to $ 714.3 million. The sales rate in the first quarter was only 47%.
Prior to Q2, Shopify’s growth rate went down. In 2019, sales of $ 1.6 billion increased by 47%. The year before, revenue was $ 1.1 billion and grew at a rate of 59%. And in 2017, sales were $ 673 million, up 73% from the previous year.
With that said, 40% -plus growth rates are still impressive. Like telemedicine, the global e-commerce market is growing rapidly. Experts estimate that the sector’s CAGR will be 11.34% by 2024, eventually reaching a value of more than $ 6 trillion.
Although Shopify’s stock rose sharply this year, it could continue to climb as consumers choose to shop online. The challenge for Shopify will be its battle for market share. It has to do with competition from big names like Amazon, Adobe-named Magento, and Facebook, where consumers can easily purchase products through Marketplace or their social networking service, Instagram.
Which stock is the better buy today?
Both of these stocks will fly high in 2020 and have it better than the S&P 500 with wide margins since the beginning of the coronavirus pandemic:
SHOP data from YCharts.
It is unclear why Robinhood investors are not as excited about these two stocks as they are about the other tech and healthcare stocks. But with both companies delivering strong numbers and many growth opportunities ahead, it’s not too late for Robinhood investors to jump on board.
If you can buy one of these shares today, go with Teladoc. The virtual healthcare provider is in a sector that is not as established as e-commerce. The opportunities for growth are much more enjoyable and competition is not nearly as fierce. Many of Teladoc’s competitors are private and lack the resources needed to pick up the telehealth giant. Teladoc is a great option for Robinhood investors looking for a surefire growth stock to add to their portfolios.
