Dear Happy Investor, for growth investors it is a tough time. In the past few months, there has been a massive sell-off in growth stocks going on. Looking at my stock portfolio, I’ve lost tens of thousands of stock returns. How do we cope with this sell-off? It surely isn’t fun. However, as happy investors, we should stay optimistic about the long-term growth opportunities of our initial investments.
My advice: look at the facts. Some growth stocks were significantly overvalued and the sell-off is justified. But for others, there seems to emerge an opportunity with cheaper growth stocks.
I’ve listed 10 beaten growth stocks (in random order). Some have fallen 20% from their previous highs, and others more than 60%.
Of course, the recent sell-off is not a standalone reason for an opportunity. You should also investigate the potential growth prospects of each stock so that you can determine whether the sell-off is justified or not. If not, you might have an attractive buying opportunity for high returns in the long term.
Note: I will not discuss details per stock as I usually do. This is just a list of potentially interesting buying opportunities with unique growth stocks.
Be careful: many of these growth stocks are still relatively expensive compared to past valuations. Stock prices could drop another 20 – 40% if the market is becoming pessimistic.
Growth Stock 1. Teladoc Health
Teladoc Health (TDOC) has been a terrific growth stock in the past few years. More recently, they have acquired Livongo Health. Livongo Health is a terrific company as well. Although acquisitions are very risky, it does give an immense growth boost for Teladoc. As of 2020, the stock has returned +260% at the 52-wk maximum. However, during this sell-off TDOC has fallen by 48%.
At this current moment, TDOC still doesn’t make profits. The losses are significant so there is a high risk involved. And her P/S-ratio is still above average compared to the past.
Market cap: 23.3 billion
P/E-ratio: n/a
P/S-ratio: 17.5 (above average)
Earnings Per Share: -$5.94
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Growth Stock 2. Etsy
The second beaten growth stock is Etsy (ETSY). It has dropped 28% from her previous high. Still, the stock looks like if it could be very expensive. However, looking at the facts we may conclude otherwise. Etsy may still be a good growth stock that can deliver solid returns in the long term.
Market cap: 21 billion
P/E-ratio: 47 (below average)
P/S-ratio: 10.2 (above average
Earnings Per Share: $3.52
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Growth Stock 3. The Trade Desk
The Trade Desk (TTD) remains to be one of my favorite growth stocks. Now it has become bigger in terms of market cap, the growth perspective has shrunk. But it remains a very strong company with attractive growth in both revenue and profit.
Looking at the facts, it seems that TTD still has room to fall as it is “higher-priced” in comparison to the past. The EPS continues to increase.
Market cap: 25.4 billion
P/E-ratio: 107 (above average)
P/S-ratio: 29.6 (above average)
Earnings Per Share: $4.95
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Growth Stock 4. Twilio
Twilio (TWLO) is a popular stock these days. The company has a relatively high market cap. What concerns me, is that they still have huge losses. Their net margin is -30% and it seems not getting any better. On the other hand, they have very impressive Y-o-Y growth figures. So the question for Twilio is: can they keep up their growth rate and become a profitable business soon?
Market cap: 53 billion
P/E-ratio: n/a
P/S-ratio: 26 (above average)
Earnings Per Share: -$3.35
Growth Stock 5. MercadoLibre
Many investors believe that MercadoLibre (MELI) is the next Amazon. This company has strong Y-o-Y growth and keeps growing. Looking at the figures, it is not that expensive in comparison to past valuations. There is still room to fall, but perhaps less than we think.
PS: many investors consider Amazon as undervalued at this moment. You might want to take a look at this stock.
Market cap: 73.6 billion
P/E-ratio: n/a
P/S-ratio: 15.6
Earnings Per Share: -$0.08
Growth Stock 6. Coupang
Coupang Inc. is, just like MercadoLibre, an e-commerce giant. They are operational in South Korea, where they face some serious competition. This company had its IPO recently, and since that moment it has fallen by 21% (speaking of unlucky timing). We can’t value Coupang based on her past performance. However, comparing it to MercadoLibre does indicate that Coupang could be a cheaper stock. Of course, this says nothing about the future revenue and profit growth prospective.
Market cap: 66.7 billion
P/E-ratio: n/a
P/S-ratio: 5.6
Earnings Per Share: -$0.33
Growth Stock 7. Palantir
Palantir (PLTR) is another IPO stock with 52% down from her previous high. Many investors are bullish on this stock and signal to buy. In the coming days, they will launch their quarterly reports. The main question is if Palantir will be profitable.
Even after a 43% drop, the valuation is still very high in my opinion. But yes, Palantir is indeed a unique company.
Market cap: 34.8 billion
P/E-ratio: n/a
P/S-ratio: 32.6
Earnings Per Share: -$1.20
Growth Stock 8. Redfin
Another beaten growth stock is Redfin. The stock price is 41% lower than her previous high. Redfin has reported strong First Quarter 2021 financial results. There are no clear signs that the real estate market will shrink in the coming years. So yes, Redfin might be an interesting buy opportunity. Especially when the stock price continues to fall.
Market cap: 5.8 billion
P/E-ratio: n/a
P/S-ratio: 6 (slightly above average)
Earnings Per Share: -$0.23
Growth Stock 9. Poshmark
Poshmark (POSH) is a very beaten growth stock. Since her IPO the stock price is down by 56%! Looking at the chart it could be that the stock has reached its bottom. However, if the recent market sell-off continues, then POSH will likely continue to fall as well.
Market cap: 3.2 billion
P/E-ratio: 794
P/S-ratio: 12.3
Earnings Per Share: $0.06
Growth Stock 10. Jumia
Jumia (JMIA) is a very speculative growth stock in my opinion. It could be the next Amazon of Africa, or it could be nothing at all. It was highly overvalued at her previous high. The 61% stock price drop is certainly justified. At this moment it could be an interesting buy opportunity for the very long term, although I personally would not invest in this speculative stock.
Market cap: 2.17 billion
P/E-ratio: n/a
P/S-ratio: 14.44 (average)
Earnings Per Share: -$2.41