2 Breakout Growth Stocks You Can Buy and Hold for the Next Decade
Key Points
Durable growth is one of the key factors in finding stock multibaggers.
MercadoLibre should continue to grow rapidly as it scales its e-commerce and fintech operations.
The Real Brokerage is rapidly gaining share with its innovative revenue-sharing model.
- 10 stocks we like better than MercadoLibre ›
One of the best ways to find great growth stocks is to identify companies with accelerating revenue growth and the potential to deliver durable long-term growth. These are the type of breakout growth stocks that can turn into multibaggers in your portfolio.
Right now, it is difficult to find these types of businesses trading at reasonable prices. But it doesn't mean they don't exist in today's raging bull market. Here are two breakout growth stocks you can buy today and hold for the next decade to potentially achieve massive stock market returns.
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MeracdoLibre's fantastic growth acceleration
A longtime winner that has lagged the broader market in recent years is MercadoLibre (NASDAQ: MELI). The e-commerce and financial technology provider in Latin America is down from its highs due to fears over its recent profit margin compression.
However, if you look at the reasons for the business's profit margin sliding from 16% to 11%, it should make you bullish on its long-term prospects in Brazil, Mexico, and the other markets it serves. MercadoLibre has reinvested in lower shipping thresholds for fast delivery across its markets and a more robust delivery network. In financial technology, it is building out a large credit card business that requires booking upfront expenses for potential credit losses.
These are temporary headwinds that should lead to a much larger MercadoLibre business over the next decade. We are already seeing the results at play, with revenue growth accelerating to 47% year over year on a constant-currency basis last quarter.
As of this writing, the stock trades at a market cap of $94 billion with $3.2 billion in trailing EBIT (earnings before interest and taxes). This may seem expensive, but MercadoLibre's trailing EBIT margin understates its true profit margin potential. Along with fast revenue growth, earnings should grow substantially in the years ahead if the business regains operating leverage.
Long term, there is still plenty of room for e-commerce and digital financial tools to gain market share in Latin America, which should be a durable tailwind for MercadoLibre as it continues to ride to new heights. This makes it a perfect breakout growth stock you can buy the dip on for your portfolio in 2026 and hold to multibagger returns over the next decade.
A little-known real estate disruptor
Lesser known than MercadoLibre is The Real Brokerage (NASDAQ: REAX). However, it may have an even longer runway to grow over the next decade.
The Real Brokerage is a software brokerage for real estate agents trying to disrupt the traditional selling model. Historically, real estate agents would sign with an in-person broker with whom they would partner and share commission revenue. The Real Brokerage is an entirely virtual system that lets a real estate agent manage their business from a phone or computer, while taking a smaller revenue share than traditional brokerages.
Along with its aggressive affiliate program, The Real Brokerage now has approximately 32,000 agents using its platform due to this better business model, resulting in around $2 billion in revenue last year. Revenue grew 44% year over year last quarter. With an estimated 1.5 million real estate agents in the United States, there is plenty of room for The Real Brokerage to keep taking market share. Plus, it has begun expanding into mortgage underwriting, title insurance, and financial tools for real estate agents to try and earn even more revenue from existing customers.
All in all, The Real Brokerage is a hypergrowth stock with explosive revenue growth. At a market cap of just $565 million, the stock is incredibly cheap versus its growth potential. The business is not profitable right now, with a slight operating loss last quarter, but over the long term, its asset-light model should lead to healthy earnings and cash flow for shareholders.
Should you buy stock in MercadoLibre right now?
Before you buy stock in MercadoLibre, consider this:
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Brett Schafer has positions in MercadoLibre and The Real Brokerage. The Motley Fool has positions in and recommends MercadoLibre. The Motley Fool has a disclosure policy.
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