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2 Top Stocks to Buy Now at Big Discounts and Hold for Years
The Motley Fool· 2025-06-21 08:10
Group 1: RH (Restoration Hardware) - RH has faced macroeconomic challenges, including a weak housing market and tariff uncertainties, leading to a 52% decline in stock price this year [4] - The company's trailing-12-month revenue is $3.3 billion, down from a peak of $3.9 billion, but it reported a 12% year-over-year revenue growth in the latest quarter [5] - RH is expanding into the $200 billion North American hotel industry with RH Guesthouses and offers luxury services, creating a lifestyle ecosystem beyond furniture [6] - The company has historically reported higher margins than average furniture stores, with an adjusted operating margin of 7% in the first quarter, below its 10-year average of 12% [7] - The stock is currently trading at a price-to-sales multiple of 1.16, significantly below its 10-year average of over 2 times sales, presenting a buying opportunity for long-term investors [8] Group 2: Roku - Roku's stock is trading about 32% below its price from five years ago, despite showing double-digit revenue growth [10] - As a leading connected-TV streaming platform, Roku benefits from a growing digital advertising market, which constitutes the majority of its revenue [11] - The platform achieved 35.8 billion total streaming hours in the first quarter, a 16% year-over-year increase, indicating strong user engagement [13] - Roku's recent integration with Amazon Ads allows advertisers to access 80% of U.S. connected TV households, potentially boosting advertising revenue [14] - The stock is priced at a 2.74 price-to-sales multiple, at the low end of its historical range, suggesting potential for future gains as advertising investment increases [16]
Prediction: These 2 Stocks Could Beat the Market in the Next Decade
The Motley Fool· 2025-06-07 22:32
Group 1: Roku - Roku's revenue increased by 16% year over year to $1 billion in the first quarter, with streaming hours reaching 35.8 billion, up 5.1 billion from the previous year [3][4] - The platform revenue, which includes ad-related sales, grew by 17% year over year, while the device segment saw an 11% increase [4] - Roku reported a net loss per share of $0.19, an improvement from the $0.35 loss in Q1 2024 [4] - The company is focusing on deepening engagement within its ecosystem, which is seen as a long-term opportunity despite potential tariff-related challenges [5] - Roku's forward price-to-sales ratio is 2.3, indicating reasonable valuation, and it is suggested that long-term investors consider holding the stock [7] Group 2: MercadoLibre - MercadoLibre is the leading e-commerce platform in Latin America, successfully competing against local and international players [8] - The company's net revenue increased by 37% year over year to $5.9 billion, with net income rising by 43.6% to $494 million [9] - The stock has increased by 48% this year, reflecting strong performance metrics [9] - MercadoLibre's forward price-to-earnings (P/E) ratio is 52.2, which is nearly double the consumer discretionary sector average of 27.9 [10] - Despite potential economic instability from trade policies, long-term growth in the e-commerce market in Latin America positions MercadoLibre favorably for future revenue and profit growth [11]