The stock market can be fickle, turning on popular stocks on a dime with very little warning. In the case of growth stocks, it was talk of rising interest rates and the impact of the omicron variant that sent valuations plummeting over the last few months.
Caught up in the selling were some high-quality companies, which I think has left us with some great buys today. Tops on my list are DoorDash (DASH 0.28%), Coinbase Global (COIN -0.91%), and Matterport (MTTR 0.54%).
Here's a look at the drop for all three companies.
DASH Percent Off All-Time High data by YCharts
1. DoorDash
The delivery business has been booming around the world, and DoorDash has become one of the industry's leaders. But that doesn't mean the stock has done well since hitting a peak late in 2021, falling 49% in just the last few months.
It's important to keep in mind what DoorDash is building and how it's progressing. The company is a last-mile delivery service for thousands of small businesses around the world, and it's leveraging that service from food delivery to groceries, alcohol, convenience goods, and much more. With the acquisition of Wolt announced in November 2021, the company will have an even bigger international footprint.
DoorDash's stock isn't down because operations are struggling or because it's losing market share -- it's down because all growth stocks are down. Focusing on the fundamentals, DoorDash is still a great business, and as it expands its footprint both geographically and in products it delivers, I think this company will only get stronger.
Image source: Getty Images.
2. Coinbase Global
Coinbase hasn't been public for long, but it's gone through some ups and downs during that time. At the same time, the stock is hard to argue against today.
The chart shows that Coinbase has lots of cash on the balance sheet, nearly $10 billion in cash from operations over the past year, and a market cap of under $50 billion. By most measures, that would make this a value stock.
COIN Revenue (TTM) data by YCharts
There are a number of reasons investors have sold off Coinbase stock, which range from slowing revenue in the third quarter of 2021 because of a less volatile crypto market to lower valuations for growth stocks in general. But this is a cash flow-positive company in a growing industry that still has new markets to enter, like NFTs (which are expected to launch soon).
The ride may not be smooth for Coinbase investors, but I think this is a company we will look back on as a huge winner over the next decade. I also think the market has sold off this crypto stock way too far in early 2022.
3. Matterport
The market fell in love with Matterport when it first came public but quickly lost interest. If you're not aware of this disruptive stock, Matterport allows anyone with a smartphone or access to a Matterport camera to create a digital twin of a space, which can then be used for a myriad of purposes.
Think of Matterport's digital twin data as the platform companies can build on top of. Home designers can use this data as starting points for renovations; business owners can track assets; and realtors or renters can share a 3D version of homes. The number of uses is just starting to become clear.
While the market has been selling off Matterport, the business has been humming along. Subscription revenue jumped 36% in the third quarter to $15.7 million, and that's even before Matterport for Android was made available on Oct. 28, 2021, opening the product up to over 1 billion users worldwide.
Matterport is just starting to see its potential, and we need to give developers and innovators time to figure out how to make the most of the readily available digital data the company can provide. Once they do, this company could grow for a long time as a platform others are building on -- a great place to be in the tech ecosystem.
A lot to like in beaten-down stocks
Each of these companies are leaders in their industries, with the potential to grow, expand market share, and expand margins in the future. That's a great position to be in for the long term as well as now, while stocks aren't as expensive as they once were.
