2 Soaring Stocks That Have Room to Run

It might be stating the obvious, but you can raise the odds of finding a monster winner in the stock market by focusing on companies currently experiencing strong revenue growth momentum.

To give you some ideas, here are two stocks that recently jumped to new highs following their first-quarter business updates. These stocks still trade at reasonable valuations that could support market-beating gains in 2025 and beyond.

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1. Coupang

Coupang (NYSE: CPNG) delivers a unique online shopping experience in South Korea, and it has opportunities to take this business overseas. The stock surged to a new 52-week high after reporting another strong quarter of growth, but its modest valuation suggests that investors are still underestimating this incredible business.

The stock jumped 10% after reporting that revenues grew 21% year over year in Q1 after adjusting for currency changes. Coupang's profitability is also healthy, with adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) improving to $382 million, or a margin of 4.8%. Management is targeting a 10% adjusted EBITDA margin over the long term.

The number of active customers grew 9% year over year to 23.4 million in the quarter. While revenue per customer was down slightly, management noted that it is not seeing a significant effect from macroeconomic challenges or tariffs as it relates to goods flowing to the U.S.

For online shoppers in the U.S., it might be difficult to imagine anything better than Amazon's refined e-commerce services. However, Coupang offers a differentiated shopping experience to its customers in South Korea. For example, over 85% of orders arrive to customers without being packaged in a cardboard box.Coupang's stated strategy is to think of ways to amaze customers and then invest to make it happen.

Coupang is showing the potential for its offering to appeal to customers in other markets outside of South Korea. In addition to online retail, it offers a range of services like payments (Coupang Pay), food delivery (Coupang Eats), and digital entertainment (Coupang Play). It has been investing in Taiwan, where management continues to see success and believes it will be able to replicate the growth of Korea's business.

Wall Street seems to look at Coupang as another Amazon with limited potential outside its home market. But its growth in Taiwan suggests that is not the case, and there may be even more markets where Coupang's model can work. Coupang is following its own strategy of how to satisfy customers, and its financial results show it's working.

The stock trades at just 1.58 times trailing revenue, which is very reasonable for an e-commerce business growing revenues at an annual pace of over 20%. Amazon stock typically traded at around 2 times revenue in its early years of growth, suggesting that Coupang stock may be undervalued and poised to deliver market-beating returns to investors over the long term.

Image source: Getty Images.

2. MercadoLibre

MercadoLibre (NASDAQ: MELI) is dominating one of the fastest-growing e-commerce markets. It posted another quarter of robust revenue growth, yet the stock is trading at a significant discount to its previous average price-to-sales multiple.

The stock surged to a new 52-week high after the company said its revenue grew 64% year over year in Q1 on a currency-neutral basis. It also benefits the stock that the company posted a healthy 8.3% profit margin, or $494 million on $5.9 billion of revenue, even as it invests in expanding the business.

MercadoLibre has been posting high growth like this for many years. It's the go-to digital provider for financial services across its three largest markets: Argentina, Mexico, and Brazil. Its business in Argentina is booming, with currency-adjusted revenue soaring 184% over the year-ago quarter.

Management continues to invest to widen the company's competitive moat. It's accomplishing this by integrating its commerce and fintech services. For example, customers who engage with its Mercado Pago credit service tend to also use other services from the company, such as buying products through the company's online marketplace. This is creating a profitable growth cycle.

MercadoLibre will likely continue growing at high rates for several more years. Its online marketplace and fintech services are capturing less than 5% of retail spending in Latin America. It's a no-brainer growth stock to buy and hold for the long term.

The stock delivered market-crushing returns of 1,500% over the last decade. It has traded at a price-to-sales multiple between 25.9 on the high end and 3.6 on the low end. The average was around 10, but it currently trades at 6 times sales. This indicates that the stock still has near-term upside while also offering significant long-term return potential.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Coupang and MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.