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When a company splits its stock, it reduces the share price and increases the number of shares available to investors. A similar cosmetic change takes place when a cake is cut into more slices. Stock splits do not change the underlying business or its valuation in any material way.

That said, stock splits can still point investors toward good businesses because they are only necessary following substantial and sustained share price appreciation, which rarely happens by accident. For example, HubSpot (NYSE: HUBS) and MercadoLibre (NASDAQ: MELI) crushed the market over the last five years, climbing 230% and 337%, respectively. The S&P 500 (SNPINDEX: ^GSPC) increased just 55% during the same period.

HubSpot and MercadoLibre produced those returns while reporting solid financial results like clockwork, and their share prices have appreciated to the point where a split may be on the horizon. But these two monster growth stocks are worth buying whether that happens or not.

1. HubSpot

HubSpot has moved beyond its roots in marketing software to become a full-stack customer relationship management (CRM) software vendor. Its platform consists of productivity tools that help marketing, sales, and service teams personalize and optimize every interaction with current and potential customers, which ultimately helps the broader business grow.

Despite tough competition from CRM giant Salesforce, HubSpot has positioned itself as a top contender among small and mid-market businesses. In fact, the company commands so much clout in that market segment that peer-review-based research company G2 ranked HubSpot as the best global software seller in any category in 2023.

HubSpot reported solid financial results in the second quarter. Revenue climbed 25% to $529 million, easily beating the 11% growth reported by Salesforce, and non-GAAP (adjusted) earnings skyrocketed 205% to $1.34 per diluted share. Those numbers reflect a solid 23% increase in total customers and a more modest 2% increase in subscription revenue per customer.

Looking ahead, the CRM market is expected to grow at 14% annually through the end of the decade, but investors have cause to believe HubSpot will trounce the industry average, and not just because the company has shown its ability to take share in CRM. HubSpot recently unveiled an exciting product roadmap that will retool its CRM platform with generative artificial intelligence (AI) capabilities. Businesses will be able to create marketing content, surface sales insights, and even build web pages using a natural language interface. Those features will roll out over the next year, and they could be a powerful tailwind, given that the broader generative AI market is expected to grow at 36% annually through 2030.

On that note, shares currently trade at 13.1 times sales, a discount to the five-year average of 15 times sales, and a reasonable valuation given the growth opportunities in play. Investors should buy a few shares of this stock today.

2. MercadoLibre

MercadoLibre operates the largest online commerce and fintech ecosystem in Latin America, and it has the largest retail advertising footprint in the region. That puts the company at the heart of three large markets across a group of countries that would collectively be the third-largest economy if it were a single geography.

MercadoLibre has consistently grown at a rapid clip, and that trend continued in the second quarter despite currency headwinds and high inflation. Revenue rose 31% year over year to $3.4 billion on strong growth in both commerce and fintech. The company also reported a 300-basis-point expansion in profit margin driven by improved cost control that led to 112% year-over-year growth in generally accepted accounting principles (GAAP) earnings, which reached $5.16 per diluted share in the quarter.

What really makes MercadoLibre a fierce competitor is its ecosystem strategy. The company not only runs the most-visited online marketplace in Latin America — that alone is a captivating value proposition for merchants — but it also provides adtech software, logistics support, and payment processing services. And it does so to great effect. MercadoLibre is the domestic leader in retail advertising, it offers faster shipping than any competitor, and it is the fastest-growing merchant acquirer (i.e., the entity that helps authorize and settle transactions).

Going forward, investors have good reason to believe MercadoLibre can maintain its momentum. The online retail, digital payments, and digital advertising markets are growing at a double-digit pace across Latin America, and MercadoLibre has a firm foothold in all three areas. Yet, shares currently trade at a very reasonable 5.9 times sales, which itself is a significant discount to the three-year average of 12 times sales. Investors should feel comfortable buying this growth stock today.

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Trevor Jennewine has positions in MercadoLibre. The Motley Fool has positions in and recommends HubSpot, MercadoLibre, and Salesforce. The Motley Fool has a disclosure policy.

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