I think in the mid cap side of the Australian share market there are a good number of shares that have the potential to become much larger companies in the future.
Three mid cap shares that I think could grow significantly over the next decade are listed below. Here's why I like them:
Kogan.com Ltd (ASX: KGN)
I think that this ecommerce company could be a great long-term investment thanks to its exposure to the rise in online shopping and its expansion into potentially lucrative verticals such as energy and mobile. And whilst its performance in FY 2019 has been a little underwhelming, things appear to be coming together again. In the third quarter the company returned to form with a massive 96.4% increase in EBITDA. If Kogan can build on this in the fourth quarter and FY 2020, then I suspect its shares could rerate notably higher.
Megaport Ltd (ASX: MP1)
Megaport is a provider of elastic interconnection services across data centres globally. This essentially means that its users can increase and decrease their available bandwidth in response to their own demand requirements. The benefit of this is that it means they don't need to be tied to fixed service levels on long-term and expensive contracts and can just use what they need, when they need it. Thanks to the quality of its service and the cloud computing boom, demand for its services has been growing very strongly and has driven strong revenue growth in FY 2019. Pleasingly, with the migration to the cloud expected to accelerate, Megaport appears well-placed to continue growing at an above-average rate long into the future.
Zip Co Ltd (ASX: Z1P)
Zip Co is a leading buy now, pay later platform provider and arch rival to Afterpay Touch Group Ltd (ASX: APT) in the ANZ market. Thanks to the growing popularity of this payment method, its expanding footprint, and a huge lift in customer numbers, Zip Co posted an impressive 114% increase in revenue to $34.2 million and cash EBTDA of $2.4 million in the first half. I expect recent additions to its platform and increasing customer numbers will drive further strong growth in the second half and beyond.
