Stocks are often valued based on earnings or cash flow, but both metrics are ultimately limited by sales. For that reason, strong sales growth often goes hand-in-hand with share-price appreciation, and analysts anticipate strong sales growth from Shopify (NYSE: SHOP) and Cloudflare (NYSE: NET) in the coming years.

• Shopify reported $7.7 billion in revenue during the last 12 months. Wall Street expects sales to increase 94% to $14.9 billion in 2027, implying annual growth of 21%.

• Cloudflare reported $1.48 billion in revenue during the last 12 months. Wall Street expects sales to increase 136% to $3.5 billion in 2027, implying annual growth of 28%.

Read on to learn more about these monster growth stocks.

1. Shopify

Shopify is the market leader in e-commerce software, and its enterprise-grade platform Shopify Plus is the leading omnichannel-commerce software. That success stems from its ability to simplify retail. Shopify provides a turnkey solution that lets merchants build and manage their businesses across physical and digital storefronts. It also provides adjacent services for payments, marketing, and logistics.

Shopify reported excellent financial results in the second quarter, beating expectations on the top and bottom lines. Revenue increased 20% to $2 billion driven by particularly strong growth in subscription-software sales, though merchant-services sales also climbed at a steady clip. Meanwhile, non-GAAP net income surged 94% to $345 million.

Investors have good reason to believe Shopify can maintain its momentum. Management estimates its addressable market at $849 billion. The company is well positioned to capitalize on that opportunity given that Shopify merchants account for 10% of online retail sales in the United States and 6% of online retail sales in Western Europe.

Additionally, investments in more sophisticated tools — custom-storefront capabilities, wholesale-commerce features, machine learning-driven market software — targeting larger brands are paying off. For instance, gross merchandise volume (GMV) from wholesale-commerce features rose 140% in Q2 driven by more merchants adopting Shopify Plus. That is noteworthy because the wholesale e-commerce market is growing faster than retail e-commerce.

As mentioned, Wall Street expects Shopify to grow sales at 21% annually through 2027. That estimate makes the current valuation of 12.6 times sales seem fair despite being a premium to the two-year average of 11.4 times sales. Investors with a time horizon of at least three years should consider buying a small position in this growth stock today.

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2. Cloudflare

Cloudflare provides a range of cloud services that accelerate and protect IT infrastructure, while eliminating the cost and complexity of on-premises network hardware. Specifically, its portfolio comprises application performance and security services, zero trust network-security services, and developer tools. Engineering expertise and scale have helped the company secure a strong presence across all three verticals.

To elaborate, Cloudflare operates the fastest cloud network on the planet, and it powers about 20% of the web. That affords the company deep insight into performance issues and security threats across the internet, creating a network effect whereby each new data point enhances its ability to route traffic quickly and securely.

Industry analysts have praised Cloudflare for its technology. For instance, the International Data Corp. has recognized its leadership in content-delivery network software and zero trust network access, and Forrester Research has named the company a leader in edge-development platforms. Those accolades tell potential customers Cloudflare is worth consideration.

The company reported solid financial results in Q2. Its customer count rose 21% to surpass 210,000, and existing customers spent 12% more. In turn, revenue climbed 30% to $401 million, and non-GAAP net income soared 106% to $69 million.

Investors have good reason to believe that momentum will continue. Cloudflare has hardly dented its $176 billion addressable market, and investments in go-to-market capabilities are bearing fruit. Management said sales productivity showed double-digit improvement during the quarter.

As mentioned, Wall Street expects the company’s sales to grow at 28% annually through 2027. That makes the current valuation of 18.7 times sales seem reasonable, especially when the two-year average is 19.5 times sales. Investors with a time horizon of at least three years should consider buying a small position in Cloudflare stock today.

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Trevor Jennewine has positions in Shopify. The Motley Fool has positions in and recommends Cloudflare and Shopify. The Motley Fool has a disclosure policy.

2 Monster Growth Stocks to Buy Before Sales Soar 94% and 136%, According to Wall Street was originally published by The Motley Fool