Few companies in the world are as old and as successful as The Coca-Cola Company(NYSE: KO). Its namesake drink was invented in 1886, and the logo for this beverage company is reportedly recognizable by an astounding 94% of the world's population today. Its scale is absolutely massive, and the market capitalization is an enormous $270 billion.
Founded in 1923, The Walt Disney Company(NYSE: DIS) isn't as old as Coca-Cola. But its brand is similarly far-reaching. According to the Los Angeles Times, more people have heard of Mickey Mouse than Santa Claus. It's not surprising that this company has also reached a hefty market cap of more than $200 billion.
As big and as iconic as Coca-Cola and Disney are, it's hard to imagine younger companies being more valuable. But the truth is that both of these companies are slow-growing, meaning their respective market valuations are going up relatively slowly, allowing some faster-growth companies to make up ground.
A decade from now, I believe that MercadoLibre(NASDAQ: MELI) and Airbnb(NASDAQ: ABNB) could be worth more than Coca-Cola and Disney. Here's why.
1. MercadoLibre: $88 billion market cap
As of this writing, MercadoLibre needs to gain about 130% to overtake Disney and gain about 210% to surpass Coca-Cola. I wouldn't be surprised to see MercadoLibre pass Disney within the next five years and Coca-Cola within the next 10.
MercadoLibre already has the dominant e-commerce platform of Latin America, but it has ways to increase its market share in this still fast-growing space. For starters, the company launched loyalty program Meli+ last year, which gives its users perks that many other platforms don't offer. That's good incentive to use it over some rivals.
One of the things offered by the loyalty program is free shipping. This is only possible because MercadoLibre spent years building its impressive logistics network. It can ship many products free and fast, which is an important driver of adoption.
In terms of incremental opportunity, MercadoLibre's large e-commerce presence gives it the ability to branch into the rewarding new business of advertising.
Consider that Amazon launched advertising relatively recently. In the third quarter of 2020, it had just $5 billion in revenue from advertising services, whereas it had well over $14 billion in Q3 2024. MercadoLibre's advertising revenue won't necessarily be this big. But the growth trajectory will likely follow a similar path.
For the requisite growth to carry MercadoLibre's valuation beyond $200 billion, e-commerce, logistics, loyalty programs, and advertising are promising enough on their own. But there's an entire other component of the company in financial technology, and all those metrics are growing at strong double-digit rates as well.
In short, MercadoLibre does business in a lot of different areas, and all are fast-growing. Therefore, when looking 10 years down the road, I feel confident that MercadoLibre could be worth $300 billion or more.
2. Airbnb: $81 billion market cap
Airbnb stock needs to go up by 152% and 237% to pass Disney and Coca-Cola, respectively. But even though it needs to go up by more than MercadoLibre stock, I still think that Airbnb can get there on a similar timetable due to its big opportunities.
Airbnb co-founder and CEO Brian Chesky recently said: "What I expect is every year now, for the coming years, we will launch one to two new businesses that will generate $1 billion or more of revenue incrementally a year." Some of these launches could be in areas such as travel software and tourism experiences, but not all launches will necessarily be travel-related.
Investors should temper expectations. But I believe the high-upside strategy is what's particularly exciting here.
Airbnb is looking to try a lot of big ideas over the next decade. Many will probably fail. But by trying a lot of things, the odds increase for finding another lucrative revenue stream. Regarding the potential to pass Coca-Cola or Disney in value, I think that Airbnb will eventually come up with something that will get it there.
Airbnb's core business is solid, which allows for experimentation elsewhere. For perspective, nearly 123 million nights and experiences were booked on the platform during Q3 2024 alone. It also generated $3.7 billion in revenue at a free-cash-flow margin of 29%. That's incredibly strong.
Indeed, over the last five years, Airbnb's revenue has more than doubled and its free cash flow has skyrocketed, which is great for investors.
In other words, my investment thesis for Airbnb here is that its core business is rock solid, still growing, and incredibly profitable. This alone represents an upside opportunity for shareholders. But the company is also using its financial strength to experiment with many adjacent opportunities. If just one of these experiments is successful over the next decade, I believe this could provide the additional lift needed to surpass even Coca-Cola's value.
Over the long term, growth is an extremely important component in investing. Looking at MercadoLibre and Airbnb, it's clear that a healthy amount of growth will be served up during the next decade. This is why I believe both could become more valuable than Coca-Cola and Disney, and it's why both are key holdings in my own portfolio.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jon Quast has positions in Airbnb and MercadoLibre. The Motley Fool has positions in and recommends Airbnb, Amazon, MercadoLibre, and Walt Disney. The Motley Fool has a disclosure policy.
