The global economy is still facing challenges a few years out from the height of the pandemic, and this has affected companies across a myriad of sectors. The good news is, great businesses can stand the test of time in your portfolio and enhance your returns over the long run.
If you have $1,000 to put into stocks right now, there are plenty of businesses you might be considering for that investment capital. You shouldn't invest cash that you'll soon need, and you should make sure your bills are paid and savings shored up before you put money into stocks. Assuming those elements of your financial life are in order, here are two no-brainer growth stocks to consider for part or all of a $1,000 investment.
1. Intuitive Surgical
Intuitive Surgical (NASDAQ: ISRG) has been a leader in robot-assisted surgery for well over two decades with its portfolio featuring various generations of its flagship da Vinci surgical system. These systems are approved for a variety of minimally invasive surgeries, including general laparoscopic surgery, urologic surgery, gynecologic surgery, and thoracic surgery.
The company has dominated around 80% of the global surgical robotics market for years at this point. Despite the existence of other prominent players in this space, its broad footprint has driven consistent growth and excellent financials.
Looking back over the trailing 12 months, Intuitive Surgical has delivered revenue of about $7.6 billion, with profits to the tune of around $2.1 billion. Also in that time frame, the company has raked in operating cash flow of $1.7 billion.
Intuitive Surgical makes a considerable payday for each sale of one of its systems. Its da Vinci systems run anywhere from $0.7 million to $2 million apiece. However, the lion's share of the company's revenue and profits are derived from recurring sales from sources like instruments and accessories revenue, revenue from service contracts, and operating leases.
In fact, 83% of Intuitive Surgical's revenue in the full-year 2023 came from recurring revenue rather than direct-system sales. Once a healthcare provider enters into a sales or sales-type lease arrangement with Intuitive Surgical, they are making a significant investment. The maintenance of these systems and regular replacement of accompanying tools are a vital part of that investment.
The resilience of the company's business model has been key to its success. This is particularly evident as rising healthcare costs, staffing shortages, and other financial pressures have affected hospitals and its other clients around the globe, but Intuitive Surgical has managed to deliver steady growth.
Intuitive Surgical looks well-positioned to ride out these headwinds, and da Vinci procedure volume still grew by a healthy 17% in the second quarter of 2024 compared to the year-ago period. The company may be a compelling choice for some investors looking to expand their exposure to the flourishing and fast-growing surgical-robotics segment of the healthcare space .
2. Airbnb
Airbnb (NASDAQ: ABNB) has been doing extremely well alongside the travel recovery, but the boom in travel spending is just one element of the company's overall business-growth trajectory. Management has been focusing on multiple core areas that they see as key to the future of the business while refining offers for both hosts and guests.
One key element has been making hosting mainstream. Airbnb has taken key steps to remove thousands of listings that it deems low-quality from its platform, but even with these removals factored out of the picture, active listings grew by a whopping 17% year over year in the recent quarter.
Airbnb has launched over 430 new features and upgrades to its platform that benefit hosts as well as guests in recent years. One recent launch, called Guest Favorites, features the top-rated homes on Airbnb. In the months since launching that initiative late last year, over 100 million nights have been booked at these listings alone.
Management reported that the platform achieved double-digit supply growth in its listings across all regions in Q1. Airbnb has also been leaning into new marketing initiatives to drive growth to its platform.
The launch of its Icons experiences has been one notable example. Icons encompass a range of experiences that travelers can book that are hosted by well-known names in media from music to film. Previously announced Icons experiences have included everything from the ability to book an overnight in the Ferrari museum to an overnight in the Musée d'Orsay in Paris to a VIP experience with actor Kevin Hart.
Airbnb is seeing growth in short-term bookings continue to outpace those of long-term bookings, but the latter still comprise close to one-fifth of all reservations on the platform. Initiatives like discounts for long-term stays, new categories of long-term stays, and enhanced payment options for travelers booking long-term reservations are helping sustain growth in this segment.
Overall, Airbnb delivered $2.14 billion in revenue in 2024's Q1, while it had its most profitable Q1 ever with net income of $264 million. Those two figures represented respective increases of 18% and 126% from the year-ago period. The trailing 12 months have also seen the company bring in about $2 billion in free cash flow, with a free-cash-flow margin of 41%.
Even if travel spending slows given the uncertainty about the state of the global economy, long-term investors can find plenty to like about this stock that is well positioned to capture a diverse variety of forms of travel spending. For those with a minimum three-to-five-year investment horizon, Airbnb looks like a worthy contender.
Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb and Intuitive Surgical. The Motley Fool has a disclosure policy .
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