2 stealthy growth stocks I’ve got my eye on in December

This month, I’m looking at a couple of growth stocks that I’ve seen as too expensive for some time. But while their share prices haven’t moved much, the companies have made good progress. 

As a result, I think the equation is much more favourable for investors. And that’s something I’m thinking of taking a closer look at for my Stocks and Shares ISA.

Wise

Wise (LSE:WISE) is a stock I’ve changed my mind on several times over the last few years. But I’m feeling a lot more positive about it now than I have been before. 

The company’s 2025 numbers reveal what I used to think was the big problem. The firm’s profit for the year was £417m, but £444m came from excess interest on customer balances.

If interest rates fall this is likely to evaporate. And this is why I didn’t buy the stock before – I was concerned about what its profits might look like if this happened.

That’s still the case, but I hadn’t realised quite how much the firm has already benefitted from this. It’s given Wise a way to build out its network without raising debt or issuing shares.

As a result, the firm’s customers are up 22% (personal) and 11% (business) in the last year. And the company has managed to bring its take rate down to its lowest level in history. 

That’s bad for Wise’s short-term profits, but it significantly strengthens its long-term competitive position. So with the stock down this year, I’m taking another look in December.

Airbnb

When Airbnb (NASDAQ:ABNB) went public five years ago, I had an idea that I’d be willing to buy it somewhere around $80 a share. It emerged at around $130 and didn’t really look back. 

Now though, it’s trading at $117 a share and the company’s revenues have roughly tripled. So I think the value equation is much more favourable today for investors. 

The key points about the business are still the same. The fact it doesn’t own and maintain the properties on its platform makes it highly cash generative and its market position is very difficult to disrupt.

Revenue growth has been slowing quite dramatically over the last five years, which is why the stock hasn’t been a good investment. And that highlights some of the risks with the business.

These include oversupply driving down prices, uneven quality from hosts creating reputation risk, and shifting regulations. All of these have been challenges for Airbnb recently.

The kind of growth the firm saw after the pandemic may not be about to be repeated. But at the current level, I’m looking seriously at adding the stock to my portfolio.

Stealth stocks

Neither Wise nor Airbnb has crashed in a meaningful way over the last five years. In each case, though, the underlying businesses have grown significantly. 

As a result, they’re much better value than they once were. And I’m planning on taking a closer look at both as potential additions to my portfolio in December.

Focusing on growth stocks that have fallen sharply is one way of looking for opportunities. But I think investors who do this risk missing out on some of the best shares to buy.

The post 2 stealthy growth stocks I’ve got my eye on in December appeared first on The Motley Fool UK.

More reading

• Consider these 3 shares to buy before the Christmas boom
• Can my favourite UK stock soar 47% in my ISA by 2026? This top broker thinks so
• I’ve just invested £3,000 in this UK stock in my ISA and SIPP 
• 2 growth stocks I’m backing to grow my ISA by 2030 
• Missed Rolls-Royce? Here are 3 out-of-favour growth stocks to consider right now

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Airbnb and Wise Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

See author's posts