It is easy to focus on what a company is today. But in investing, what really matters is what a business could become.
Some companies are already large and well established. Others are still in earlier stages, quietly building the foundations for something much bigger. Finding these businesses early can make a big difference to long-term returns.
With that in mind, here are three ASX 300 shares that I think could be much bigger in five years.
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Megaport Ltd (ASX: MP1)
The first ASX 300 share that could have a much larger footprint in the future is Megaport.
It is evolving from a network connectivity provider into a broader infrastructure platform. With its move into compute through the Latitude acquisition, the company is positioning itself at the centre of how businesses deploy and manage cloud and AI workloads.
This shift could significantly expand its addressable market. Instead of just connecting infrastructure, Megaport is now moving toward enabling it.
If execution is strong, the company could become a much more important player in the global digital infrastructure space.
Morgans thinks Megaport's shares are seriously undervalued. It recently put a buy rating and $16.00 price target on them, which implies potential upside greater than 100%.
Netwealth Group Ltd (ASX: NWL)
Another ASX 300 share that could be significantly larger in the future is Netwealth.
Netwealth operates an investment platform used by financial advisers to manage client portfolios. It might not grab headlines, but the business model is incredibly powerful.
As funds under administration grow, revenue tends to rise alongside it. And because the platform is highly scalable, a large portion of that growth flows through to profit.
The company has been steadily gaining market share, supported by strong technology and service. If it continues on this path, the business could look very different in five years' time.
Morgan Stanley is a fan of the company and has an overweight rating and $35.00 price target on its shares. This suggests that upside of almost 40% is possible between now and this time next year.
Temple & Webster Group Ltd (ASX: TPW)
A third ASX 300 share that could grow meaningfully is Temple & Webster.
Temple & Webster operates in online furniture and homewares, a category that is still transitioning from physical stores to digital platforms.
While the company has faced periods of volatility, it has continued to build brand awareness and expand its customer base.
What is particularly interesting is its improving profitability. As scale increases, the business has the potential to generate stronger margins.
If the shift to online continues and the company executes well, it could be significantly larger in five years than it is today.
Bell Potter is bullish on the company's outlook. It recently put a buy rating and $13.00 price target on its shares, which implies potential upside of almost 100% for investors.
