According to some experts, the world is moving toward a different economic reality by 2030, in which traditional ownership concepts will be redefined. The World Economic Forum suggests that we will move toward a future where people focus more on using services rather than owning products. This means that instead of buying things outright, people will likely rent or subscribe to what they need.
This shift is already happening, with the subscription economy predicted to hit $3 trillion in 2025. This new way of doing business aims to benefit everyone, from communities to customers, while being open and sustainable.
In this new reality, three companies stand ready to lead. Let’s examine how each is preparing to thrive in this “own nothing” economy.
Urban Outfitters (URBN)
Urban Outfitters (URBN) is leading the way in retail, with a mix of popular lifestyle brands like Anthropologie, Free People, and Nuuly. The company has moved beyond traditional retail by embracing the rental market through its Nuuly subscription service, which fits right into the “own nothing” economy expected by 2030.
The stock has been performing well, up 7% over the past month and 49% over the last year, showing investor confidence in how URBN is adapting to changing consumer habits.
With a market capitalization of $5.45 billion and and a forward price-earnings ratio of 15x, the stock looks reasonably priced for its growth potential.
URBN’s financial results are impressive. In the third quarter, it reported $102.9 million in net income and $1.10 earnings per share, with sales climbing 6.3% to $1.36 billion. Nuuly stood out with a 48.4% growth in sales. Analysts predict $0.95 in EPS and $1.63 billion in revenue for its current quarter.
Holiday sales data adds to the positive outlook, with a 10% rise in net sales driven by strong performance across its brands and online channels. This growth, especially in rental services, aligns perfectly with the shift toward a subscription-based economy.
Analysts generally view URBN positively, giving it a “Moderate Buy” rating. The mean target price is $55.82, suggesting potential downside of about 5.5% from the current price, indicating that the stock may already be fairly valued at this level.
Invitation Homes (INVH)
Invitation Homes (INVH) specializes in acquiring, renovating, and leasing single-family homes in high-growth markets, making it a perfect fit for the growing trend of renting over owning. Recently, INVH increased its quarterly dividend to $0.29 per share, offering a forward dividend yield of about 3.8%, which is appealing for income-focused investors.
The stock’s performance has been mixed lately. INVH is down 4.4% in the year to date and 7.7% over the past year. This decline could be an opportunity for long-term investors betting on the shift toward rental living.
With a market cap of $18.76 billion, INVH holds a strong position in the single-family rental market.
To bolster its growth strategy, Invitation Homes recently announced a joint venture to invest $500 million in newly constructed homes across high-growth markets. The initiative, which includes $200 million in equity commitments, highlights the company’s focus on expanding its portfolio and meeting rising demand for rental properties as we approach 2030.
Financially, INVH remains solid. In Q3 2024, total revenues grew 6.9% year-over-year to $660 million. While net income dropped 27.8% to $95 million, Core FFO per share rose by 6.8% to $0.47, showing strong operational performance. The company has also raised its full-year Core FFO guidance to $1.88 per share.
Analysts generally view INVH positively with a “Moderate Buy” consensus rating. The mean target price of $36.44 implies potential upside of 19.4% from its current price, reinforcing its appeal as a long-term investment option in the growing rental market.
PayPal (PYPL)
PayPal (PYPL) is a major player in digital payments, perfectly positioned for the “own nothing” economy. The company makes it easy for consumers and businesses to handle digital and mobile payments through its well-known platforms like PayPal, Venmo, Xoom, and Braintree.
With a market cap of $89.96 billion and an enterprise value of $90.55 billion, PayPal is a dominant force in fintech. Its forward P/E ratio of 18.32x suggests that the stock is reasonably priced based on its potential for future growth in the expanding digital payments market.
The stock has been on a run, climbing 41% over the past year. As of Jan. 24, it trades near $89, up 4.4% in the year to date and 1% in the last month.
PayPal’s financials back up its strong position. In its most recent quarter, total payment volume grew by 9% to $423 billion, while revenue rose 6% to $7.8 billion and its adjusted EPS rose 22%. Analysts expect EPS of $1.12 and revenue of $8.27 billion for its next earnings report.
PayPal is also expanding its reach with new partnerships. Its collaboration with Global Payments (GPN) will enhance checkout options for U.S. merchants by integrating PayPal and Venmo solutions. Meanwhile, a partnership with Ooredoo in Qatar will grow PayPal’s presence in the Middle East, showing its commitment to meeting global demand for seamless payment solutions.
Analysts are optimistic about PYPL, giving it a “Moderate Buy” rating overall. The mean target price of $93.74 suggests upside of 4.47%.
Conclusion
These three stocks are poised to thrive in the “own nothing” economy of 2030. Urban Outfitters is revolutionizing retail with its rental service, Invitation Homes is capitalizing on the shift toward renting over owning, and PayPal is leading the charge in digital payments. While the future isn’t set in stone, these companies are adapting to changing consumer behaviors and economic trends. By investing in URBN, INVH, and PYPL now, you might just be getting ahead of the game for the subscription-based world of tomorrow.
