Investors have long been amazed by the resilience of the economy Amazon. Despite its enormous size, the country continues to exhibit high growth thanks to its leading position in e-commerce, cloud computing and, more recently, artificial intelligence (AI).
Nevertheless, with a market capitalization now that the economy is over $2.3 trillion, it is likely approaching a point where high-rate growth will become more difficult. So investors might consider other consumer-oriented stocks that can more easily translate market potential into faster growth. The next two stocks have the potential to generate higher returns than the e-commerce and cloud giant.
Granted, an energy drink that’s the No. 3 market share isn’t an obvious place to look for a better-performing stock. However, investors should take a closer look Celsius (NASDAQ: CELH). It differentiates itself by marketing itself with the use of natural ingredients. That approach helped it gain a following among health enthusiasts.
Sales levels also increased dramatically after it signed a distribution deal PepsiCo. That increased its availability, allowing outlets like Amazon and Costco to sell its energy drinks in bulk.
Unfortunately, distribution issues caused inventory to drop more than 70% from last year’s highs as a major distributor, likely PepsiCo, drastically reduced orders.
Nevertheless, the distributor is likely to right-size its orders in the future, making this issue likely to become less of an issue. Moreover, revenues of $1 billion managed to grow by 5% in the first three quarters of 2024. While that’s dramatically slower than the 104% annual growth seen in the first nine months of 2023, it’s still on the rise.
Furthermore, international purchases made up just 5% of Celsius’s sales in the first nine months of 2024. Still, sales in the Europe and Asia Pacific regions grew by a combined 38% annually in the first nine months of the year. Given the growth potential of these markets, overall revenue growth should improve as the company’s non-North American markets claim a higher percentage of revenue.
Furthermore, the share price drop has pushed the price-to-earnings ratio to 41, a level just below multi-year lows. Assuming overall revenue increases over time can at least match the international growth rate, Celsius shares are likely to leave recent distribution disruptions behind and resume their march higher.
If investors prefer to outperform Amazon within their own sectors, they can also turn to the company widely seen as the “Amazon of China.” Alibaba.com (NYSE: BABA).