Last month, I took a look at a few stocks that could double again in 2024. Let's try to unearth some more potential winners for next year.
DraftKings (DKNG +1.41%), CrowdStrike (CRWD +4.33%), and Royal Caribbean (RCL 2.00%) have soared 222%, 136%, and 143% this year, respectively. Shareholders have enjoyed a great 2023 in these stocks, and there could be some more upside in the year ahead. Let's take a closer look.
NASDAQ: DKNG
Key Data Points
DraftKings
If you bet on DraftKings this year, the gamble paid off. Shares of the online wagering and fantasy sports leader have more than tripled in 2023. Business has been booming in recent years, and you can thank the U.S. Supreme Court's decision to officially legalize wagering on sporting events in 2018. It opened the door for DraftKings to offer more than just an outlet for fantasy football fans.
DraftKings continues to gain traction by striking partnerships with leagues and media networks as it takes a larger sportsbook presence in more states. In short, the headwind of regulatory risks for sports betting stocks has become a tailwind. DraftKings' business began to pick up dramatically after the Supreme Court ruling, but it somehow managed to accelerate its top-line gains in 2020 when the COVID-19 crisis shut down many live sporting events. The past four years have been amazing, with annual revenue growth of at least 70%.
- 2018: 18%
- 2019: 43%
- 2020: 90%
- 2021: 111%
- 2022: 73%
- 2023: 76% (through the first nine months)
Image source: Getty Images.
Business is slowing. Revenue gains decelerated to 57% in its latest quarter. DraftKings sees 44% to 50% top-line growth for the current quarter, closing out 2023 with a roughly 65% full-year revenue increase. Lost in the deceleration, the company has actually been raising its guidance as the year plays out. It was only modeling 33% revenue growth for 2023 when the year began.
Things are somehow going even better at the other end of the income statement. One thing that has kept DraftKings in check in recent years before this year's surge is its deep losses. After three consecutive years of 10-figure losses, its deficit should be cut in half this year. Investing in state-by-state rollouts and acquiring customers isn't cheap, but DraftKings is finally turning the corner. All 21 major analysts following the company expect it to post its first profitable quarter as a public company here in the seasonally potent fourth quarter.
With monthly unique paying customers increasing 40% to 2.3 million over the past year -- and average revenue rising 14% on top of that -- it didn't pay to bet against DraftKings in 2023. It probably won't pay to bet against DraftKings in 2024.
NASDAQ: CRWD
Key Data Points
CrowdStrike
There aren't a lot of enterprise software companies that have doubled this year, but a standout here has been CrowdStrike. Its Falcon line of cloud-based cybersecurity solutions has become popular. Even in hard times, a company can't afford to be lax with protecting the data of its business and its customers.
CrowdStrike posted another blowout financial performance two weeks ago. Revenue rose 34% with adjusted earnings skyrocketing 85%. It has topped Wall Street's profit targets by at least 9% in each of its last four reports. It also raised its guidance, something it has done with every passing quarter this year. Like DraftKings, the top-line upticks are decelerating. However, it's hard to lose by investing in companies that perpetually put out "beat and raise" reports.
NYSE: RCL
Key Data Points
Royal Caribbean
Cruise line stocks have been coasting this year. The two leading players have seen their shares more than double this year, and it's easy to see why. No travel sector was hit as hard by the COVID-19 outbreak as the cruise ship operators. They had to shut down their operations a lot longer than other tourist transporters, and their tax-advantaged status of sailing on international waters on foreign-flagged vessels made it hard to score any kind of government subsidy during the lull.
The cruise lines took on debt and bloated their share counts, but business is booming again. Revenue rose 39% on explosive profitability. Royal Caribbean has a loyal fan base for the premium experience it provides on its fleet of 64 ships. Bookings are now ahead of where they were in 2019. The stock hit another three-year high this week, but the shares are cheaper than you think.
Royal Caribbean is trading for just 13 times next year's projected earnings, and that's before considering that it has posted double-digit percentage beats on the bottom line every quarter this year. Royal Caribbean had to navigate some rough waters to weather the pandemic storm, but now it's ready to head to exotic ports of financial call in 2024.
