Transcription
Seven stocks I'm buying now, October 2025 edition. Welcome in, ladies and gentlemen, to my favorite video I do for you guys each and every month where we go over the stocks that I will be buying basically in the current month.
No, whenever I go through these stocks like we're going to do here today, okay, it's important that it's not just about the stocks I'm sharing with you, but the thought process on how I get there, the projections I run. I don't just throw darts at a dart board hoping things work out for companies. I'm actually running numbers on them, showing you the math behind it and why this stock is going to explode to the upside over the next 3 years, 5 years, those sorts of things. Okay?
So, we'll be going through all that in this video here today. I understand it's been a banger of the last 3 years. Uh public account 3.8 mil plus. If we go back 3 years ago, the public account was right around a million dollars. So, it's been incredible to see the growth there, but there's a lot of opportunities still out there for long-term investors. There's short-term drama, I know, but uh for long-term investors, there's incredible opportunities. We're going to go through seven of those opportunities in this video here today. Okay?
I've prepared 91 slides for you guys. 91. This is a 2-day prep for this video. The only thing I ask in return for all this work I put in for you here today is if you could please just hit that like button. If you could just make that thumbs up button glow, that would mean the world to me. Additionally, if you want to see more of my videos in the future, make sure you are subscribed here to the channel. YouTube's more likely to show you my videos in the future if you're subscribed here. Okay? Appreciate each and every one of you for being here.
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All righty, folks. Number one of these seven stocks up here today is HNST, the Honest Company. This company has only gone up 1%. The stock has only gone up 1% in the past year. It does not reflect the reality of the business model in my opinion. Now, Honest sells diapers, wipes, lotions, soaps, skincare products, things like that. Okay? Might not seem like the most exciting business, but I'm in this game to make money. I don't need to always be in the most exciting business because many times the most exciting businesses are actually stocks where you'll lose 50 or 80% of your capital over time or 100% of your capital. This is a boring business, but it's not going to be a boring stock or give boring stock market returns over the years. Okay.
Now, does this look like a business that should only be up 1% in the past year as far as a stock price goes? Absolutely not. In my opinion, looking at thousandx.com here, looking at the charts feature, right? Clear trajectory of growth. Uh companies should continue to grow in future years. Look at the margins. This company's gross margins bottomed out here in the mid-20s. And over the last several quarters, they've been able to bring their gross margins up to 40% plus, ladies and gentlemen. 40% plus. This company's was able to take their net margins from deep in the red to now positive net margins on this company as well. Okay, look at the earnings per share. This company was a dumpster fire a few years ago. I mean, an absolute dumpster fire. They were losing fortunes of money on the bottom line and they have now flipped over to profitability. I expect this company to be profitable from here on out. And now the name of the game for them is just building that profitability higher and higher and higher year in and year out. Okay.
Look at the shareholder equity of Honest. It is obviously exploded to the upside for this company and for a very small market cap. Keep in mind the market cap of Honest is around $400 million. The company is loaded loaded to the sky with cash. We're talking $70 million plus of cash. And remember, like I said, this company is a market cap of 400 mil and they've got 70 mil plus just in cash sitting on the balance sheet. Absolutely incredible amount of cash, right? So, we got a growing company, growing revenues, right? Earnings per share that's now positive. We got margins exploding to the upside from the mid-20s just a few years ago to now 40 plus, right? And showing continued growth. We've got a company that is loaded to the sky with cash on the balance sheet. And we've got a CEO here in in in Carla Vernon who's done an amazing job running this company. You know, I was skeptical when she first took over the role, but she's done nothing but be a great CEO. I can say that, man. The numbers are at the end of the day, it comes down to math. And if you look at every possible thing you want to look at in this company since she took over this company a couple years ago, it's all up and to the right. The margins, bottom line, topline, the revenue growth, the earnings per share growth is insane. Okay.
Now, as far as honest, where's the stock going? I think this is going to a 1 to 2 billion market cap before we get to the 2030s. Right now, it's a $400 million market cap. So, this is a type of stock that I think can 3x or maybe even more than 3x over, let's call it the next four years essentially. So, as long as Carly keeps running this show like she's been running it, man, we got a long way to climb here. So, that's why I featured at number one here today. Incredible opportunity. And uh by the way, if small cap stocks catch a bid over this next few years, they've been small cap stocks in general have been laggers for years, if those ones actually start to begin to catch a bid over this next several years, that will just be more um let's call it rocket fuel behind honest over the next several years. Okay.
All righty, guys. Stock number two of these seven stocks up here is Salesforce. Ticker symbol CRM on this one. This is a $240 stock right now. The stock has done nothing the past 5 years. It's down 5% in the past 5 years, but the next 5 years will not look like the past 5 years. You can never look at a stock and say, well, you know, it's done bad in the past 5 years. I mean, it's going to do bad in the the future 5 years. Uh same way you can't look at a stock and say, well, it's done amazing the last 5 years. It'll do amazing the next five. Doesn't work like that. Okay.
Look at this company and tell me, does this look like a company on the right trajectory or the wrong trajectory over the past 5 years? 2021, right? You know, as far as revenue goes, and this is their fiscal years, did $21 billion of revenue. Then they bump it up to 26 billion the next year. $31 billion of revenue in the next year. $34 billion of revenue in the next year. Almost $38 billion in their last fiscal year. This fiscal year they're in, they're expected to do $41 billion plus of revenue. And then next year, $45 billion plus of revenue. That does not look like a company that is stagnant at all. It looks like a great growth company. Additionally, you want to see it in a charts feature. This is looking at our thousandx uh stocks.com charts feature. Look at that growth. It's unbelievable, right? And this is where the company's expected to continue to grow grow here.
Now, when it comes to CRM, we're talking about a company that's accelerated their gross margins right from kind of the low, let's call it low 70s to the very high 70s, almost pushing up to 80% gross margins here recently. If you look at their net margins, net margins are now right around that 20% level or maybe slightly under. Keep in mind I believe Salesforce looking at kind of peer companies there a lot of their competitors and whatnot stocks in the space I think CRM over the next 5 years could get to uh basically net margins approaching a 30% level so there's a long way to grow grow in regards to their net margins for this company looking at the earnings per share of this company this is where we're at right now on a trailing 12-month basis for earnings per share this is where the company's earnings per share is expected to go to.
Now, how's the math work around this? Right? That explosion of earnings per share. How's that going to happen? Well, they've got revenue growth. The profit growth is at a much faster clip, right? And then you can buy back massive amounts of shares. And that's how you get an earnings per share growth that will be exploding over the next several years. Look at the operating income of this company on trailing 12-month basis, right? Very, very nice. This is not going to stop or slow down. This is just going to continue to accelerate. So, they're throwing off incredible operating income. And then they're able to bring down the share count. So you think a tech company like Salesforce, you think what? They must be diluting shareholder value because they're probably always giving their employees a bunch of shares, right? Look at them bringing down that share that share amount quarter in and quarter out. It's beautiful. That's a beautiful trend and a very important thing to keep in mind in the future when you look into stocks. Are they basically are they diluting your shareholder value? So shares outstanding is going up massively or is it going down? Salesforce is at a stage in their company much more mature company, right? They're bringing those shares outstanding down.
If we look at the balance sheet, cash marketable securities to the sky in regards to this company, their major product that is their next their big opportunity over the next 36 months as far as a sales opportunity is what's called Agent Force. This Agent Force is their take on AI and basically having companies have these AI agents that can reason, plan, execute complex business tasks within a Salesforce environment. So their goal at Salesforce is basically, and they're not called Salesforce for no reason, just because they're amazing at sales. So understand this. It's very important everybody understands what I'm about to say right now so you can understand why Salesforce is going to be a great stock over the next number of years in my opinion. Listen, when it comes to Agent Force, in my opinion, over this next 36 months, they're going to end up selling this product and getting it to um let's call it a massive amount of their customer base. Now, when they get this product into their customer base, it's not necessarily about making a ton of money, right, initially from this. This is just about getting their customer base all signed up for this product so then it can show its value over the coming years and then Salesforce can really start to monetize this in a major way after that essentially. So, this next 36 months is key. Get everybody to use a product that's in their customer base, love the product, need the product, want the product, and then we can talk about making fortunes of money from this down the road. Right? So, this is a major growth vector for the company for the next several years. Now, keep in mind, this product is relatively new. It hasn't even been out a full year yet. As far as big availability, it's kind of toward the end of October 2024, so it hasn't even been available for a full year yet. I mean, there's just an incredible opportunity here, right?
No, Mark Benioff. Listen, if you want to look at one of the GOAT CEOs in in in the past, I would say 20 to 30 years running business, look at Mark Benioff. Remember, whenever you go to make an investment, what is the most important thing over everything? I'm talking over the revenue, over the earnings per share, over blah blah blah. What's the number one thing when you go put your hard-earned money into an investment? It's trust. Trust is the most important thing. So when we're looking at a company to invest into, we've got to trust that the CEO is going to do a great job. Does that CEO have a great track record of running that business over the past 10, 20, 30 years? Right? And if you look at Mark Benioff's track record, the man's a one of one. He's incredible. He's done, you know, a one of one job running this company and he deserves as many billions of dollars he has in net worth because he's built a great company. And so I would not bet against Benioff over the long term, right? Obviously the company had a very rich valuation on it many years ago and that valuation's come down now. It's very, very reasonable on this company when you look at a forward P basis. So I feel very comfortable investing into Salesforce.
Number three of these seven stocks up here that I will be buying is Adobe. Adobe stock AB. This one's had a brutal past 5 years. Down 30%. The stock price has gone down the past 5 years. I do not believe uh it's going to go down 30% the next five years. I believe this is uh going to be quite a uh very attractive stock in regards to reward potential here. Adobe has a multitude of different businesses, but just understand this. If you're a business owner, high probability you'd sign up for Adobe's products. If you're a marketing professional, high probability you're going to be sign up for Adobe suite of products. Uh, and if you're a creative, somebody that posts on YouTube, Instagram, TikTok, Facebook, social media in general, high probability you're going to use Adobe's product suite. Okay, so they've got that covered. Uh, incredible company, one of the strongest companies in the world just on a mathematical basis, right?
This is what Adobe's revenues have have done over the last number of years. They went from 12 billion of revenue to 15 billion of revenue to 17 billion of revenue, $19 billion of revenue, $21.5 billion of revenue, right? In double-digit growth year in and year out. Now, when we look at what they're expected to do in the fiscal year that's about to finish up here, $23.6 billion. Next year, $25.8 billion. So, this is a company that is very consistent. They're just going to put up their numbers quarter in and quarter out. That's going to say good job Adobe like well done right now. This is a masterpiece of revenue growth. I mean, is it more like if you were trying to draw the most beautiful revenue growth chart for a company, that's exactly how you would draw it right up and to the right and just continually growing and growing and growing those numbers. So, that's beautiful.
Now, if we look at Adobe on a margin uh front, this is a company that is a freak. Okay, listen. This is a company that basically has gross margins right around that 90% level and and net margins right around that 30% level. Companies do not do this, ladies and gentlemen. Like, this is the like, good luck finding any other company in the world that does this. And if you do find any other, it's going to be very, very few. Like, you're going to be able to fit them in in a hand essentially, right? When you're pushing gross margins 90% and bottom line margins 30%. Unbelievable. Okay.
Now, this is where we're at in regards to a trailing 12-month earnings per share, right? Clearly, they're climbing that earnings per share wall, and that's expected to accelerate very nicely over the next few years here. And the reason being is you look at the operating income of Adobe, it's all-time highs on a trailing 12-month basis, and that continues to explode to the upside, right? Additionally, look at the shares outstanding. We thought it was impressive what Salesforce was doing. Adobe's a whole other level here, folks, in terms of bringing that share count down. So, when you've got revenue growth and you've got as high a margins as Adobe has here, right, and you're able to run your organization lean and you're able to buy back tons of shares, your earnings per share is going to explode upward, right? Which is phenomenal. So, you know, the great thing for companies like Salesforce and Adobe that are doing big buybacks right now is they're able to buy these shares at very cheap prices, which means you can buy even more shares, right?
No, my base case for Adobe stock here it is. I have this company in terms of where this stock price is going between now and 2029. I have this company doing revenue growth on average 8% per year. Is that a crazy number? No, absolutely not. Adobe's been a double-digit revenue growth company for the longest time and I have them only doing 8% revenue growth for my base case. Very conservative. Have them doing 10% net income growth on average per year over the next, you know, four years essentially, right? A 23 to 28 P/E ratio is very fair for a company growing high high single digits revenue and it's called very low double digits net income. That gives me a compound in growth rate between 15 and 20%. This is a very conservative base case for Adobe stock. Like that's that's why the stock's a buy.
Now, in regards to CEO, remember we talked about trust earlier, right? You got to trust when you put your money into a stock, you got to trust the big dog who's running the show. And the CEO has done an incredible job. He's led this company since 2007, which means he got the company through what? He got the company through the Great Financial Crisis, which is if you got your company through that and got it out to the other side, it's impressive, right? Additionally, he was able to do with Adobe what what you know not everybody was able to do, which is take this company from a kind of let's sell a product one time into a subscription-based revenue model, right? And using the cloud for their products and do it in an amazing fashion. And he's able to build this company into one of the most profitable companies in the world, right? Um and you know, one of those companies that's kind of a one-off in regards to their margin profile. And so when you think about now they're transitioning into this AI future, you have to think, can the current CEO do that? And the current engineering team, the current workforce at this company, can they execute on that? And I have no doubts that they'll be able to execute on that. So I believe Adobe is very well positioned here for the next number of years. And this the valuation on the stocks at if you look at the the P/E ratios on the stock the P/E ratio on the stock and the forward P/E on the stock is about the lowest you'll find in in at any point in the last 10, 15, 20 years for the stock. It's incredibly low right now and so I think this company deserves a much higher P/E ratio on forward P/E than it's at because it's one of the safest business models you're going to find out there. Put up great growth quarter in and quarter out. People stay signed up for their suite of products and I understand there's competition maybe in this space that face. Uh people have a lot of work to do before they really compete with Adobe's product suite in any sort of substantial way, right? And remember, Adobe is not going to just sit still. They're going to like they don't have they don't pay that fortunes, those billions of dollars a year on that, you know, that incredible team that continues to build out their products. They don't pay that for nothing, right? All those employees that are high-level employees, some of the best of the best, like they're going to continue to push the products and innovate in the future. And so I like Adobe. I like Adobe a whole lot. Okay.
All righty, folks. Number four of these seven stocks, we'll call this halftime. Okay, we're about halfway through these stocks, is Nike. Ticker symbol on this one is NKE. Deal of a generation on this stock. Stock has gone down 43% over the past 5 years. Oh, obliteration, right? But this is a deal of a generation. When it comes to Nike, this is one of the most valuable global brands in the world, right? You know, it's above even companies like Instagram, Disney. Like, I could I could show this logo to people all over the world. And people all over the world. Doesn't matter if I'm in Alabama or if I'm in Los Angeles or if I'm in Shanghai or if I'm in some part of Brazil. Doesn't matter if I'm in Mexico. Doesn't matter if I'm in Canada. Doesn't really matter almost where I am in the world. If I just show that logo, people are already going to know, "Oh, that's Nike." They're already gonna think about all the great athletes that wear Nike products and the success and all those sorts of things, right? Without ever saying a letter, right? Without ever saying a word, just show them that and they'll know it across the world. That's valuable. Very, very valuable. Right?
Now, in regards to Nike, there's been a few times throughout its history that you've gotten kind of like generational buying opportunities where the stock crashed, right? Everybody was worried about competition or this or that whatever they were worried about at that particular time right and it was like a general generational buying opportunity. So for instance on a split adjusted basis uh back in October 1984 the stock fell to 12. In 1993 stock went through a major crash and bottomed out at about $1.50 in 1993. In 2009 in the Great Financial Crisis stock bottomed out right around $11 in early '09. Right? So you every once in a while you get this like generational buying opportunity in regards to Nike where people are so scared of the business model and what's going on and this and that right and the numbers are like not as good as they were or something like that right and then in 2025 this is a generational buying opportunity in regards to Nike the stock has been trading this year anywhere between $50 or $80 and I think it's going to be a long time before we see those sorts of pricing again right now you got to understand what's happened historically with Nike and what's happened recently Phil Knight, visionary CEO, right? Builds his company from nothing into a giant company, right? And he's just amazing. Like he's the one that thought about signing Michael Jordan, right? And risked a lot of the company on Michael Jordan and the success of that and the Jordan line and building this into a global brand, right? And really understanding to not just take the profits back out of the business, but reinvest billions of dollars every year back into athletes, back into sports leagues. So you you're like basically you you form a business that no one can compete with cuz no one can put that sort of money back into their business and no one's willing to put that sort of money back in the business cuz everybody always gets greedy. They want to take more out. And Nike just always understands, no, we're going to spend a great deal of money right back in the business and reinvest that for the future, right? And he was a visionary. Like it's visionary to come up with a business model like that and create a business model. Like if you you got to understand legends of business have so much respect for Phil Knight and what Nike's built over the years. Like Steve Jobs is one of the you know Steve Jobs obviously arguably the greatest entrepreneur in the history of the world, right? Steve Jobs always made sure to recognize Nike and their success and talked about they sell a commodity. They sell shoes but when you buy Nikes you feel something different, right? And he would talk about like how they built that brand and doing it in such a when you got the other business legend saying, "Dang, they're good." That's when you know you're doing something right. Right.
Now, as far as the screw-up, the board of directors made a very bad choice in 2020. And basically, they brought in this man, I call him the screw-up, John the screw-up, okay, to run the company. Uh, in my opinion, he did a horrible job. He came from the consulting world, Bain & Company, right? Not a good sign. He was an outsider of the company. He was working at some tech companies like eBay and uh Service Now and some tech companies and they brought him in to run the business and made a huge mistake in my opinion. And this guy screwed up in a massive way. Didn't understand it. Didn't understand the culture or anything like that. Okay. But we got the fixer. Thank goodness a man came in named Elliot Hill to fix this mess that this last man made. And he made a lot of mistakes. The biggest one going trying to go too much direct to consumer because he comes from the consulting world. So, he's thinking, "Oh, man. We're going to try to get everybody to buy directly from our app and our website and not have to buy through our resellers because we're going to make even more margin on that, right?" And uh yeah, you still need all your retailers, right? Like still a lot of people like to shop at Foot Locker, Dick's Sporting Goods, all the other sporting goods stores, right? They still like to go to the mall. Oh man, we can't just assume everybody's going to go to the Nike app and go to the Nike website, right? So, that wasn't the only mistake he made. He made many other mistakes, but the fixer comes in, Elliot Hill. This is a man that should have been the CEO of the company starting in 2020, but he was passed over. Elliot Hill, in my opinion, he would never probably publicly admit this. I wish he would. It would make for some very entertaining content, but Elliot Hill, I believe he retired from Nike in 2020 cuz he knew this dude was not going to do a good job running the company. And he's like, I don't want to be any part of this. If they're going to drown this thing, let him go drown it. I don't want to be part of it. And so he dipped. He retired. He was chilling, man. You know, he's on the board of a few different things while he was gone at Nike. He watched the ship go down, right? Uh, from my understanding, he kept in contact with a lot of high-ranking people at Nike. From rumors I hear out there, things were not good. People didn't like John. They knew he was running things into the ground. And the board of directors realized we got to get John out of here and we've got to get Elliott Hill into this company and they brought Elliott Hill back and right away morale at the company from my understanding took off right they understood like we've got the the you know Elliot Hill been working at Nike since the 1980s he'd seen this whole thing through from like this little brand to becoming a global icon around the world and he was passed over like his success at the company was a 101 like it was crazy. The board of directors made such a horrible decision, but it's all in the past. They brought Ellie Hill back in and uh he's fixing a mess. But the craziest thing about this whole story that not a lot of people know is this is not the first time Nike made a mistake just like this. Back in 2004, they got brought in this gentleman, William Perez, to run the company. He was an outsider. He wasn't a Nike person. He was an outsider. And they brought him in. He was at SC Johnson. He only lasted 13 months. So, at least Nike back then realized we needed to move on faster. They let John on for way too long and that's why the stock crashed and everything like that, but they realized like, you know, we screwed up. We brought in the wrong guy. And, you know, my hope is if uh like Nike is a stock I would love to own for the next 10, 20, 30 years. My hope is a board of directors doesn't ever screw up like this again and try to bring an outsider into the company to run the show because it's shown like it doesn't work. Okay? It does not work.
Now, look at this. Look at the screw-up's numbers and look at Elliot Hill. Oh my gosh, what a turn, right? Already, like it's amazing. Now, you just bring in a guy that actually knows the business inside out and he can just start fixing stuff right away, right? Look at for the past five quarters that the screw-up was in place, right? Missed revenue by 56 million, missed revenue by 249 million, missed revenue by 42 million, missed revenue by 60 million, just missing numbers, missing number left and right. Elliot Hill takes over, beats revenue estimates by 247 million, beats revenue estimates by 235 million, beats revenue estimates by 373 million. And the most shocking one of all, the latest quarter they just reported, right? $730 million beat. $730 million. They did the unthinkable and they grew revenue. No one, and I mean absolutely no one, was expecting them to grow. Even myself, I wasn't expecting them to grow revenue in that quarter. It was supposed to be a down quarter and he just shocked the world into the $730 million plus number. Like that's ridiculous in terms of a beat there. Incredible. So the turnaround's way ahead of time. And keep in mind the earnings per share. You know what that beat by? 22. Unbelievable beats by Elliot Hill.
Right now in thousandx.com, we have three different features for earnings call. You can listen earnings call straight up. Right. And then we have AI transcripts. So you'll kind of go through the most important parts of the conference call and kind of give you a summary of what happened there, right? And then we have a transcript feature. I want to show you guys a couple things on how great of a CEO Elliot Hill is here on the transcript. Right? So right here, this is very important. He says, this just shows you the level of detail that Elliot Hill's uh you know at, right? They they basically surveyed their customer base and found that runners want three things he's talking about in running shoes. They want big cushioning, stability, and an everyday shoe that returns energy. Right? He says, "In response to that, we moved with a sense of urgency and completely redesigned their Romero shoe, right? The structure for Pegasus, um, you know, that solves these three insights." That's the type of stuff I'm talking about. Like, you think Mr. Bain & Company, Mr. Consultant from the tech world was thinking about, okay, what type of shoe do runners really? No, come on, man. That guy's a, you know, a bean counter. What are we talking about here, right? He talks about the early results. He's talking about basically, you know, retailers in or no, in regards to running still. We'll get into the retailer stuff in just a moment. He talks about the early results have been positive. Nike running growing over 20% in the quarter, their latest quarter, they grew Nike running 20%. That business had been dumpster fire for a while, right? They were getting their lunch eaten by Hoka and On and those companies. Nike's coming. Take that right back. You're done. You're done, baby. You're done. On and Hoka, watch out. I would not want to go against Nike this next few years here. That's going to be a brutal matchup.
With Converse, Converse, he says, "With Converse, we we put in a new leadership team in place." I bet you that last leadership team was put in by Johnny Boy, right? And that Converse business was, you know, has been a dumpster fire over the last, you know, bit of time here. Numbers have been horrible. So, he says, you know, those guys are out. We brought in a new leadership team that's taken aggressive actions to better position the company for profitable growth in regards to the Converse business. He says of the priority of now actions elevating full marketplace in the is in the early innings. The the positive is that in North America where we invested first some of the big steps forward in the quarter. The team continues to give more consumers access to the brand in more premium environments. We reset over 1,300 running spaces in the quarter from Dick's Sporting Goods to Nordstrom to Heartbreak Hill. And we are also pleased to with the launch of our brand store on Amazon. They've launched a brand store on Amazon. He says we're driving stronger engagement and sales than anticipated on Amazon. Right? This is what I'm talking about, man. You got to be you got to be in the nitty-gritty, man. You got to be able to walk retailer stores and be like, you know, this isn't this isn't the right assortment. This isn't the right look. This isn't the right branding, right? We need to make switches here. Elliot Hill just understands on a very high level of what needs to be done here in the business model, right? And you there's a sort of insight you only have from some man that's been working at the company since the 1980s. He saw the business grow from this little thing in this massive Goliath. I mean, you know, when he left the company, the company was on top, right? And so, as far as Nike goes, the glory days will be back. I mean, you know, this stock reached a peak around $170 back in 2021, right? Before John got to put all the stuff in place that really ran the company down the the tubes in my opinion, right? And so I think a return to glory is happening in this next 24 to 36 months and we'll see the stock go to the $150 to $200 level. Keep in mind as the revenue grows, the margins are going to grow even faster and the profitability is going to grow even a faster clip. So everything's right on the right track and uh thank goodness Elliot Hill is running this company cuz great American brand and I don't want to see it go under. You know, when I say go under, keep in mind Nike even in these bad times is still better than the best companies in the world in this space. But, you know, it was clear if that guy kept running the show, it was not going to be pretty. But everything's changed. That's what happens when you bring back an OG who knows his business inside and out, right? And actually is passionate and lives and breathes Nike on a day in day out basis. That's who you need running the show, right?
All righty, folks. Number five of these seven stocks up here is PayPal. PayPal. Woo, baby. Dead money since the summer of 2022. Just dead money. We all know PayPal, right? They have their PayPal business, they have Venmo business, and then they have um you know, other business that's kind of like backend of payment providers and things like that, right? Now, Alex Chriss was brought in to take over for this company, and he was brought in at toward the end of 2023 essentially. Right now, Alex Chriss, a lot of promise from him. He came over from Intuit and you know Intuit's one of the most loved stocks in the stock market over the last I would say 10 years or so, right? One of the biggest companies actually in the stock market as well. Uh giant and one of the excuse me most consistent companies on a quarter and a quarter hour basis. I better drink some tea. I told you guys this video was a beast. Mhm. Beast of a video. Okay.
Now Chriss came over and it I think he was at the job a few months. I think it was maybe in 2024. He did an interview. Was on CNBC said, "We're going to shock the world, right? We're going to innovate at a rapid pace." Well, the thing was is 2024, they might have been doing a lot behind the scenes at PayPal, but we didn't see that level of innovation we really wanted to see at PayPal in 2024 at least, right? And so investors kind of like, okay, are we an innovator? What's going on here? Right? And so they kind of gave up on the stock. But here we are in 2025 and that massive amount of whatever work they were doing behind the scenes in 2024, Alex Chriss's first year. Now we're starting to see it cuz I'm looking at press release after press release of they're doing this or doing that. Right? Look at this. September 25th, Venmo teams up with quarterback Drew Allar to launch Penn State Venmo debit card. PayPal announces a multi-year relationship for uh US buy now pay receivables with funds managed by Blue Owl Capital. That's important to keep PayPal as a more of an asset-like business model, right? Google and PayPal forge multi-year partnership to revolutionize commerce. PayPal ushers in a new era of peer-to-peer payments, reimagining how money moves to anyone, anywhere. And by the way, if you want more details on all this stuff, I didn't want to spend 3 hours going through just all the details of all these deals and what PayPal's up to and new products and services and things like that. You can look into all this, right? Skip the wait list. PayPal and Venmo users offered early access to Perplexity's new Comet browser with free Perplexity Pro subscription. PayPal drives crypto payments into the mainstream, reducing costs and expanding global commerce. Introducing PayPal World, a global platform connecting the world's largest payment systems and digital wallets. Uh starting with interoperability of PayPal and Venmo. This was posted by Prev Stock Group member here in the just the past few few days. Uh this is in Dubai. DP World has signed a memorandum of understanding with global commerce platform PayPal to collaborate on first of its kind digital payments initiative designed to simplify and speed up cross-border trade. The agreement which could see transactions executed in minutes rather than taking potentially days, right? They're just innovating at a rapid pace now at this point in time. Like whatever work they were doing in 2024 like I'm happy we're seeing it now because 2024 was just a year where like I said it just seemed like dang are they really like like Alex Chriss talking a big game here but we're not really seeing it. I think we're starting to actually see this in the real world now at this point in time right and even like small wins like this like I just last night literally I was checking out a Domino's and got some Buffalo Wild Wings and some Domino's brought it back to the house just want to eat some some um what we call it fun food unhealthy food. Okay. Uh but moral of the story is here I uh you know was going to check out and then I just love that PayPal and Venmo are both listed there on Domino's, right? So you got option for Apple Pay, debit, credit cards, cash or PayPal or Venmo, right? Just that's little wins. That's little wins plus big wins. It all adds up to a lot in the end, right?
Now here's the deal. Okay, looking at thousandx.com the charts feature here, right? Obviously, the company's been growing revenue and obviously they expect to continue to grow revenue. But the biggest thing for this stock to like how's the stock go from 60-something to 130? How we 2x this one? You got to speed up this revenue growth. If we accelerate revenue growth, then we're really going to be talking in regards to PayPal. You got to understand PayPal's price for like no growth. The 4 P/E in the stock is 13. 13. Ladies and gentlemen, you got a forward P/E of 13 in your stock. That's basically the market. Keep in mind the market trades at, you know, 4 P/Es like 18 to 26. You go to 13 on your stock, basically the market's saying, "We don't believe in you. We don't think you can grow this business, right?" They're priced for no growth. So, if this company can accelerate these growth rates, then we're really going to be talking about a stock that will get moving rapidly. Under compare feature on ThousandX, right? I compared PayPal versus Visa versus Amex. And look at this. PayPal's at a 134 P/E, Visa's at a 31, and American Express at a 21, right? It's clear as day like when you compare P/E PayPal versus like peer type companies gosh like they get no premium at all like they just like such a disrespected stock. It's basically the market saying we don't believe in you PayPal but here's the thing you got to always look in depth in the numbers and are things happening with the business model that look very promising and what we've seen in PayPal very recently is a massive turn in regards to year-over-year growth. Okay, so let me show you something here looking at the uh quarterly revenue trends of this company, but on a year-over-year basis. Okay, this was Q2 2024, they had revenue increase 8.2%. Then the next quarter, it gets worse. Q3 2024, they go down to 5.8%. The next quarter, what do you think's going to happen? It got worse. Q4 2024, year-over-year growth goes down to 4.2%. What do you think happens in next quarter? It gets worse. Q1 2025, only 1.2% revenue growth. What do you think happens the next quarter? Oh, a break in trend. This latest quarter, they just grew revenue 5.1% on a year-over-year basis, which means there's likely a bottom hit in regards to growth rates. And it looks like we're back into an acceleration phase. We've got to get confirmation on that on the next quarter. But if they grow the next quarter at further than a 5% year-over-year growth number, we're clearly in an accelerating growth trend at that point in time. So, now we're just waiting for confirmation. But it looks pretty darn promising, right? When you have a clear trend of revenue growth decelerating, decelerating, decelerating, and then you have an acceleration, that's the first glimpse of like, okay, I think we're back. If we get a second quarter, let's say the next quarter grows at 6, 7 or 8%, then it's clear like our trend is back up in the right way in terms of accelerating growth. And then the question is how far are we going to accelerate that growth, right?
Now, in regards to the bottom line, earnings per share, right? Double-digit earnings per share growth. I think this company can have all the way till 2030. I think it looks very realistic. Why? I think this company can easily grow at mid-single digit or high double or excuse me a high single-digit growth rate. So somewhere between 5 and 9% a year. Okay? No, if they grow at double-digit revenue growth, then we're talking earnings per share is going to skyrocket. But all they need to do is somewhere between 5% and 9% revenue growth per year. And I think we can get easily double-digit earnings per share growth on this company. And the reason being is they're focused on profitable growth now. It's one one of Alex Chriss's big initiatives, but remember I showed you Salesforce and Adobe and how they're bringing down their share count. You might not see one as powerful as PayPal. Look at the rate they're bringing their share count down. If your net income continues to go higher, which PayPal's net income should continue to go higher for years to go in the future, right? And you're bringing down your share count like this, your earnings per share is going to explode to the upside. Like PayPal eventually could buy back the whole dang company if they want. This is incredible. Incredible. So very, very bullish, ladies and gentlemen. Very, very bullish.
Now the path to $130 on the stock and let's call it a double up from here. I think it's easy over the next 12 to 24 months as long as they post high single-digit revenue growth. They get back to high single-digit revenue growth. Right? If they get back to double-digit revenue growth, which is where this company used to grow for the longest time, oh boy, we're going to have to see all this innovation, all these new products in the marketplace, how they're going to do, right? All these new services. But if they ever got back to low double-digit growth, we'll be talking PayPal 200. We'll get back to the glory days. Remember the glory days for PayPal was this stock was a $300 stock. Okay, there's a long way to go back to that. But I feel like the path to 130 is easy. The path to 200 at 300. It's a little more difficult, but it it is there for the company. They just got to put up the numbers, right?
Or regardless, number six of these seven stocks up here is Amazon. Amazing on. So, this is one of my big dog stocks. It's a $330,000 position for me in the public.
account. It's also a major position for me in other portfolios as well. It's one of my favorite stocks. You have, you got to understand when you get Amazon, you're not just getting an e-commerce business. You're getting three major businesses. And by the way, you're getting a bunch of minor businesses as well, but you're getting three major businesses. One is e-commerce, right? The second is AWS. The third is advertising businesses. Now, after that, they've got a bunch of smaller businesses, but those are three big dogs that really drive this company's revenues and profits and margins for the company.
Okay. Now, when it comes to Amazon, they're basically a double-digit growing company on autopilot. Like, basically, because these three businesses are such incredibly strong businesses, it's very hard to compete with them. They grow double-digit revenue on autopilot, basically year in and year out. And I don't see that ending at any time in this decade. Maybe at some point in the 2030s, maybe they stop growing double digits, but in this decade, like it looks like the company is just, they're just set, man, to continue to grow and grow and grow on autopilot.
Look at the company's margins over time, the gross margins, and how those have pushed up. They went from this company having, let's call it, low 40s gross margins to now they've pushed over 50% gross margins. Look at the net margins of this company. Net margins went from negative to now net margins are kind of in that like 10% level, and we're still early days, early days in regards to those net margins. Net margins long-term will probably go closer to 20%. So there's a long way to go in regards to that game.
Look at the earnings per share of this company. This is where we're at right now on a trillion 12-month basis. This is where we've gone and this is where we're expected to go in regards to this company. Look at the operating cash flow of this company. Shocking on a trillion 12-month basis. Operating cash flow of $121 billion. Double-digit growth. Incredible. Look at the operating income of this company. Operating income of $76 billion in just the past 12 months. That is 40% growth on a year-over-year basis. And these growth rates are astonishing that Amazon's putting up here. Shareholder equity on this company of well over $300 billion of shareholder equity has been exploding for Amazon and continues to right now.
Let me show you my base case, bull case, and my bear case for where Amazon stock is going. Okay, this is my base case. This is what I expect for Amazon to do over the next four years. Okay, from 2026 to 2029, I think they're going to do 12% revenue growth on average per year. I think they're going to do 18% net income growth on average per year. Right? They don't have to battle it out as much on the e-commerce side now and kill their margins. Additionally, AWS continues to scale. They're going to run this company lean. It's clear Andy Jassy is going to run this company lean, and their advertising side of their business continues to build out substantially. And we know where do you make the most money, the most margins? Advertising. Oh my gosh. Ask Google, ask Meta about those advertising numbers, right? And how much profit is in that business. So the net income is going to go up, go up at a much faster clip than revenue in my opinion. So net income growth, I think it's very conservative to say net income growth 18% per year on average, 2026 to 2029, right? Which puts them at only net income margins of 12% come 2029. You know, and I think this is a company long-term that will get to net income margins of 20%. Okay, 33 to 38 P. So very fair for a company growing top line 12%, bottom line 18%. That gives me a compound annual growth rate of 19% to 23%. I'm going to take that every day.
But more excitingly, look at my bull case. My bull case is still kind of conservative. 14% revenue growth on average per year. 20% net income growth on average per year. Still net income margins of 12%. 35 to 40 P ratio is very fair for a company growing 14% revenues, 20% bottom line. Right? That puts a stock somewhere between about $500 and about $560. 22% compound annual growth rate on the low end, 26% on the high end.
But this is the best part. This is the best part. And if you want to know why Amazon's a must-buy stock today, tomorrow, yesterday, the next day, look at my bear case. My bear case has them only growing revenues 10% per year. Doesn't seem horrible considering how much growth the e-commerce business still has. AWS is still growing at a strong double-digit clip. The advertising business is exploding. If they only grow revenues at 10%, that's a huge disappointment, right? But that's all I have them doing for my bear case. Net income growth at 15%. You're probably at a 30 to 35 PE at 10% top line, 15% bottom line. Gives me a compound annual growth rate on the low end of 13%, 17% on the high end. Where else are you going to find that? That's why it's like it's impossible not to buy Amazon right now. If I run a bear case on a stock and I still get double-digit compounded annual growth rate, I'm going to take that every time. Like I'm not going to, how am I going to look at Amazon and run a bear case and be like, ah, you know, that double-digit compounding growth, I'm not going to buy it. I got to buy it. And so that's why you see me continue to buy shares of the stock because that's just beautiful. That's just beautiful, man. Like usually when I run a number, a bear case on a stock, a lot of times my compound annual growth rate is actually negative. There's no growth or it's like very low single digits, like 1%, 3%, 4%, 2%, something like that. I get double digits. Come on, man. It's a buy.
Seven of these, seven stocks up here is. Listen, I'm going to tell you guys, I'm sick of talking about this stock. And it's not because I, I love this company so much. I continue to buy the stock, but I've been talking about this stock since 2023 on the channel, and it's made me fortune. It's a perfect combo of a company that has the next 10 years of growth ahead. It's a value stock trading at very cheap valuation, and it's a dividend payer, right? But I'm sick of talking about it. But I'm going to talk about it because it's still buying. I'm still buying the stock. And you know what it is? Cheesecake Factory. Ticker symbol one C A K E is a stock that has made me over $47,000 of profits in the public account. That does not include all the dividends the stock pays me out every 3 months across my portfolios. Okay.
Now, when it comes to Cake, they've got the ATM machine, which is the Cheesecake Factory restaurant concept. North Italia, Flower Child have the next 10 years of expansion across the United States of America and maybe even international long-term. And they've got several other successful concepts coming behind those that they're testing to see how many markets they can take those into. But basically, Flower Child and North Italia going across the whole United States of America, and they've got 10 years of growth in regards to how many, you know, locations they can scale to those. Okay.
Now, what was my bear case, base case, and bull case for Cheesecake Factory? My bear case has them only growing revenues 5% per year, which when you think about how many North Italian, Flower Child they should open over the next few years and the concepts coming behind that, 5% revenue growth would be bad for the company. And there's inflation always, right? So menu prices should go up 2-3% a year, right? So 5% revenue growth would be very bad. But we're in a bear case. Also, on my bear case, I basically have no growth in net income in regards to no, no lift. So net income only grows at the same percentage as revenue, which would also be bad. I have their net income margins being stuck at 5%, which would also be bad, right? So 5% revenue growth on topline, bottom line, you're probably somewhere between a PE of 18 and 23 for a stock like that, right? With mid-single-digit growth, that gives me a compound annual growth rate of, we can call it, you know, 9 to 16% between now and 2029. Like, you're going to tell me I'm not going to buy Cake with those horrible numbers? Like, come on. And I still get there. I still get to the stock to somewhere between $78, $99. Like, I got to take that.
This is my base case for Cheesecake Factory. 7% revenue growth per year on average. 9% net income growth on average per year, which is a little lift there. Still in that net income margin is a 5% range, right? If I got Cake growing 7% revenue per year, 9% on the bottom line per year, you're going to be able to command somewhere between about 25 and a 30 P ratio. Puts a stock somewhere between about $125 and $150. Gives me a compound annual growth rate of, let's call it, uh, low 20s to high 20s. Not bad for a base case. And it's not like this is crazy revenue growth. Like, oh my gosh, Cheesecake Factory is growing revenues 20% a year. Like, no. If that happens, oh my gosh, can you imagine that?
But what about my bull case for Cheesecake Factory? This is what I expect. But what about my bull case if things go a little better than I anticipate? Well, here's my bull case for Cheesecake Factory. I then do 9% revenue growth. Still not even double digit, by the way. And look at the, the projections here. 9% revenue growth per year between 2026 and 2029. 11% net income margin. So they have a little lift there, right? Still net income margins of 5% range. If you're growing top line 9% per year on average, bottom line 11% per year on average, 28 to 33 P is pretty realistic for this company. Gives me a compound annual growth rate of 28 to 34%. Although I'm sick of talking about this stock, it continues to be a money maker and it's going to continue to be a money maker in my opinion in a massive way over this next 5 or 10 years. And that's why I just got to continue to buy Cake stock. I got to continue to buy Cake stock.
Alrighty, folks. I appreciate you joining me. I hope you enjoyed this 91-slide video. Hope you got a lot of value out of this one. Hope you learned a little bit here today and why I like certain stocks. Okay. If you want to take your knowledge up to a much higher level than where you're at, you want access to all of my premium courses, access to my private Discord chat, exclusive weekly videos, access to thousandx.com so you can run your numbers, figure out if you're getting ripped off on a stock, getting great deals, all that good stuff. Pin comment down there. Click on that, fill the form. Let's get you in there. And by the way, you will receive your steel membership cards in the mail once you join us. And there's a 1000X steel membership card and then we've got your private group steel membership card right there. Absolutely beautiful. Much love and have a great.