Supply chain chaos: 2 stocks set to crush the market in 2022 (and beyond)

Last year, business closures due to a pandemic weakened global supply chains, reducing the availability of raw materials and other goods. As the bottlenecks were lifted, rising consumer demand put more pressure on an already strained system. And in August, a record 4.3 million Americans quit their jobs, adding labor shortages to the list of headwinds.

This chaos is already affecting consumers, who find it increasingly difficult to buy everything from cars and electronics to household products and medicines. Unfortunately, experts believe it will take at least six months (and possibly more than a year) before supply chains normalize, meaning industries like construction, manufacturing and retail retailers are likely to face significant headwinds for the foreseeable future.

However, this predicament can actually be a tailwind for companies like Airbnb (NASDAQ: ABNB) and Coupa software (NASDAQ: COUP). Here’s why these two stocks could crush the market in 2022 (and beyond).

Image source: Getty Images

Airbnb: a disruptive business model

Airbnb is shaking up the travel and tourism industry. Its platform collects accommodation from over 4 million hosts around the world, helping customers find accommodation in over 100,000 cities. More importantly, Airbnb offers a much wider choice, both in terms of location and real estate, than traditional hotel chains.

Guests can book a private coastal cottage, a rustic farmhouse in a small town, or a trendy apartment in the heart of a big city. Airbnb also lists a variety of unique accommodations, such as a treehouse in the rainforest or a castle in the English countryside, providing a unique experience for travelers.

This benefit has helped Airbnb recover from the pandemic faster. During the first half of the year, the company’s turnover increased by 89%. During this time, Hyatt and Hilton – the two most valued hotel brands in the world, according to Brand Finance – both recorded revenue declines of 11% over the same period. Airbnb also saw its gross reservation value increase 320% to $ 13.4 billion, implying strong revenue growth in the coming quarters.

Going forward, supply chain chaos and labor shortages could further strengthen Airbnb’s advantage. Hilton CEO Chris Nassetta recently said staffing challenges in hotels are “possibly the biggest problem” the company faces. And Hilton is not alone. Marriott currently has over 10,000 vacancies in 600 hotels, which can translate into a bad experience for guests at its properties. In addition, any new construction or renovation project will likely take longer to complete in the current environment, which will limit short-term expansion plans.

Meanwhile, Airbnb can onboard new hosts and expand its inventory in minutes, while incurring minimal costs. This means that it can adapt to changes in consumer demand much more nimbly than its competitors. Of course, this is true even without the challenges of the supply chain, but the current environment makes it even more relevant.

Ultimately, these favorable winds should help Airbnb gain market share. This is why this growth stock is expected to crush the market in 2022 (and beyond).

Coupa Software: A Better Supply Chain Solution

Coupa specializes in business expense management (BSM). Its platform connects its customers with more than 7 million global suppliers, helping them purchase the goods and services they need to run their businesses. At the same time, Coupa’s BSM tools help companies build more robust supply chains and save money through strategic purchasing.

For example, customers benefit from pre-negotiated discounts with suppliers – a result of Coupa’s scale – creating a network effect that should strengthen over time. In other words, each new buyer on the platform creates value for each supplier, and vice versa. Coupa also orchestrates group sourcing events, allowing companies to pool their collective purchasing power to negotiate better prices.

Based on this, all of these transactions create data, and Coupa relies on artificial intelligence to make sense of that information, bringing out information that helps customers capitalize on cost savings opportunities and avoid vendors. at risk. In fact, Coupa is the only BSM platform that offers real-time prescriptive information, giving the company an edge over its competition.

Coupa differentiates itself even further with Coupa Pay, a deeply integrated payment platform that streamlines the procurement process. Once again, no other player in the industry has a comparable solution. These advantages have translated into strong financial results.

In the last quarter, Coupa’s last 12-month revenue jumped 40% to $ 643 million, and while the company is still not profitable under GAAP, free cash flow has reached 101. million dollars, up 37%. Coupa has also launched an App Marketplace, allowing customers to synchronize data with analytics tools such as Microsoft Power BI and human resources software like Working day. The move further expands the functionality of its BSM platform, enhancing the value proposition for potential and existing customers.

Going forward, Coupa is expected to see an increase in demand as supply chain bottlenecks continue to weigh on businesses around the world. And with an addressable market of $ 94 billion, this tech company certainly has plenty of room to grow. This is why Coupa is expected to crush the market in 2022 (and beyond).

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Comments are closed.