As you consider the companies that dominate the market cap of the major market gauges, you may be wondering which companies are the titans of the future. While the following list likely doesn’t represent that type of life-changing potential, each of the seven companies represented have disruptive technology or concepts that are suited for a post-COVID world and the revenue and earnings expectations reflect that opportunity.
According to Wikipedia, disruptive innovation “is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances. The term was defined and first analyzed by the American scholar Clayton M. Christensen and his collaborators beginning in 1995, and has been called the most influential business idea of the early 21st century.”
In an age when the cost of a worker is going up, the need for companies to replace workers, work remotely, e-commerce and other technologies are going to be important going forward. The ability of a company to find a niche in this environment can mean significant profits down the road and a higher share price.
The following seven companies have exhibited that they have the technology or innovation that can make them relevant in the future.
Disruptive Stock #1: Carvana Co (NYSE: CVNA)
Carvana is an e-commerce platform for buying and selling used cars in the U.S. The company offers a touchless buying and delivery solution that fits well in the current climate.
Analysts are currently forecasting 33.4% and 44.5% revenue growth for 2020 and 2021. The company recently beat analyst estimates by 25.3% and has a 5-year projected growth rate of 30.50%.
Disruptive Stock #2: Docusign Inc (NASDAQ: DOCU)
DocuSign provides cloud-based software that provides an e-signature solution that helps businesses execute agreements. The automated workflow across the entire agreement process is a huge disruptor for those requiring documentation and entering contracts.
Analysts are forecasting 35.2% and 28.3% revenue growth for their 2021 and 2022 fiscal years. The company recently beat analyst estimates by 20% and has a 5-year projected EPS growth rate of 31.2%.
Disruptive Stock #3: Teladoc Health Inc (NYSE: TDOC)
Telehealth isn’t exactly a new innovation to the healthcare industry, but the recent developments mandated by states has allowed for increased adoption of telehealth solutions and Teladoc is at the forefront.
Analysts are currently forecasting 79.1% and 37% revenue growth in the 2020 and 2021 fiscal years. The company missed analyst estimates and saw significant negative revisions to current year and next year EPS but has a 20% 5-year projected EPS growth rate.
Disruptive Stock #4: Ontrak Inc (NASDAQ: OTRK)
Ontrack recently changed its name from Catasys to carry the same name as its artificial intelligence (AI) software. The company offers an artificial intelligence, virtualized outpatient treatment for mental health and other chronic medical conditions. The use of AI allows the company to make diagnosis more quickly and with less information while providing an entire course of treatment. The ability to quick diagnosis with fewer costs is a huge advantage in an environment like we’re in.
Analysts are currently projecting 152.55% and 92.5% revenue growth for the 2020 and 2021 fiscal years. The company missed analyst EPS estimates in the most recent earnings report and has seen significant revisions. However, the outlook for growth is there. The current 5-year projected EPS growth rate is 30%.
Disruptive Stock #5: SmileDirectClub Inc (NASDAQ: SDC)
Similar to TDOC, SmileDirectClub offers a teledentistry platform for teeth alignment. The are a 3-D printing company that contracts with over 250 state licensed dentists.
While the company is being negatively impacted in 2020 with COVID-related closures. The revenue estimates for 2020 are for a 16.1% decline in revenue but a 40.2% increase in revenue in 2021. The company missed EPS estimates in its most recent earnings report badly but is projected to grow it earnings by 178.2% a year for the next five years.
Disruptive Stock #6: Vapotherm Inc (NYSE: VAPO)
Vapotherm is a company that makes a revolutionary nasal canula that uses Hi-VNI technology that delivers humidified, heated, and oxygenated air at a high velocity. It potentially provides a better alternative to infants and COVID-19 patients that would otherwise require a respirator.
The current revenue estimates for 2020 revenue growth is 122.7% but is expected to taper off in 2021 with an 8.5% projected decline. While there is a leveling off in 2021, the 5-year projected EPS growth rate is 49.5%.
Disruptive Stock #7: 3D Systems Corporation (NYSE: DDD)
3D Systems isn’t exactly a new company as one of the original publicly traded 3-D printing companies. The company is still not reflecting the potential of the technology that was displayed during the lock-down. The company quickly scaled to provide PPE in a very difficult time.
The current projections for revenue and EPS growth doesn’t exactly stand out. However, the company is projected to turn a non-GAAP profit in the 2021 fiscal year. While this company is an anomaly on this list in regard to projections, it’s role in the pandemic may further open opportunities to grow in the future.