Could buying these ASX shares at $9 now be like investing in Tesla in 2010?

This Melbourne company is making big strides in its field and has returned a phenomenal 67% each year for its investors already.

| More on:
A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

I discussed earlier this month how it took a while for Tesla Inc (NASDAQ: TSLA) to become a brand name synonymous with the entire electric vehicle industry.

Those investors courageous enough to buy split-adjusted US$1.13 shares at the initial public offering (IPO) in 2010 have now been handsomely rewarded.

A $10,000 purchase of Tesla stocks back then would now be worth an amazing $2.13 million.

The point of bringing up that journey is not to annoy you that you missed out on the sweet action. Rather it serves to highlight how backing outstanding businesses early on and persisting for the long term can produce incredible riches.

While no one knows what will happen in the future, there are ASX shares with the potential to execute Tesla-esque growth in the years to come.

Let's break down one such candidate:

Revenue up 9x, share price up 13x

Telix Pharmaceuticals Ltd (ASX: TLX) makes diagnostic and treatment products for cancer.

The last 18 months have been a whirlwind for the Melbourne business.

Its prostate cancer imaging agent Illuccix went commercial last year, while products for other forms of cancer are undergoing trials or approval stages.

Revenue was, incredibly, up nine-fold in the 2023 financial year compared to the year before. And despite having so many products still progressing through the pre-commercial stages, Telix was cash flow positive.

Therefore it may not surprise you that the Telix share price has already multiplied 13 times over the past five years.

That's a crazy compound annual growth rate (CAGR) of 67%.

How's the outlook for these ASX shares?

Despite the explosive growth already behind it, there are plenty of reasons to suggest Telix could keep going over the next few years.

The first is all that revenue growth came from just one product, Illuccix. The company has many others in development, to deal with cancers in different parts of the body.

Of course, there is no guarantee they will all make it out the other side of medical trials and regulatory approvals. But even if some of them can join Illuccix as a paying product in the coming years, Telix's investors will be very happy.

The other ace up Telix's sleeve is that it has the balance sheet to make acquisitions.

In fact, it has already started playing this card. 

Just this week the business announced the acquisition of US outfit Qsam Biosciences, which is developing therapies for various types of cancer. At the start of this month, Telix completed the takeover of surgery technology provider Lightpoint Medical.

Many professional investors are believers in Telix.

According to CMC Markets, all seven analysts that cover the stock currently rate it as a buy.

Motley Fool contributor Tony Yoo has positions in Telix Pharmaceuticals. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals and Tesla. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

Suncorp share price Businessman cheering and smiling on smartphone
Growth Shares

3 ASX 200 shares for smart investors to buy

Analysts think these shares could be smart buys this month. Let's find out why.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Growth Shares

Looking for ASX growth shares? I rate these 2 as buys in May

These ASX investments have an exciting future. Here’s why.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Growth Shares

The best ASX growth stocks for smart investors to buy with $5,000

Analysts are bullish on these shares. Let's find out why.

Read more »

Happy young couple saving money in piggy bank.
Growth Shares

Where to invest $2,500 into ASX 200 shares today

Analysts think these shares could be top buys for investors with money to invest.

Read more »

Two people having a meeting using a laptop and tablet to discuss Seven West Media's balance sheet
Growth Shares

3 excellent ASX shares to buy for your SMSF

Analysts think these shares could be top picks for SMSF investors. Let's find out why.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Growth Shares

2 ASX growth shares to supercharge your portfolio

Analysts think these shares could be in the buy zone for growth investors right now.

Read more »

A group of people gathered around a laptop computer with various expressions of interest, concern and surprise on their faces. All are wearing glasses.
Growth Shares

Turn $300 into significant wealth: 3 explosive ASX opportunities for Aussie investors

Analysts think these shares could be great picks for growth focused investors.

Read more »

A man looking at his laptop and thinking.
Growth Shares

What I'd buy with $2,000 on the ASX right now

Here are three options for investors to look at this month.

Read more »