When investors look back on 2020, they're going to remember two things:

  1. The incredible volatility caused by the coronavirus disease 2019 (COVID-19) pandemic. 
  2. The overwhelming outperformance of growth stocks.

The latter shouldn't be a surprise. The Federal Reserve's exceptionally dovish monetary policy should keep lending rates at or near historic lows through 2023. That's an open invitation for high-growth companies to borrow cheaply in order to hire, innovate, and acquire other businesses.

But not all growth stocks have outperformed in 2020. Below are three relatively beaten-down growth stocks that have all the tools necessary to soar in 2021 and beyond.

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Vertex Pharmaceuticals

Considering that the tech-heavy Nasdaq Composite and benchmark S&P 500 are up 44% and 16% year to date through this past weekend, it's certainly a disappointment to find high-growth specialty drug developer Vertex Pharmaceuticals (NASDAQ:VRTX) up less than 8% in 2020. Over the trailing six months, Vertex is actually down 15%, while all major U.S. indexes are up between 16% and 28%.

The reason for this weakness is an Oct. 14 clinical program update that announced the discontinuation of VX-814, an experimental therapy to treat alpha-1 antitrypsin deficiency that was in phase 2 trials. The update pointed out that several patients had elevated liver enzyme levels, four of which were greater than eight times the upper limit of normal. 

But this is just one study -- and one study does not a trend make when it comes to Vertex.

What makes this company so special is its focus on treating patients with cystic fibrosis (CF). CF patients experience thick mucus production that can obstruct the lungs and pancreas. Vertex's multiple Food and Drug Administration (FDA)-approved treatment options have helped improve quality of life for CF patients.

Vertex's latest moneymaker is next-generation combination therapy Trikafta. It took far less than a year for Trikafta to reach blockbuster status (at least $1 billion in annual sales). Early data suggests it'll have little issue eventually clearing $6 billion in peak annual sales. 

Vertex has an exceptional track record developing novel therapies, with Wall Street calling for a doubling in annual revenue between 2019 and 2023. Long-term investors should take this recent weakness as a gift.

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Ping Identity

Another beaten-down growth stock investors should consider gobbling up is cybersecurity stock Ping Identity (NYSE:PING). Although shares of Ping are actually up 19% this year, they're down 15% over the trailing-six-month period, and are well behind the veritable sea of triple-digit returns throughout the cybersecurity space.

If you're wondering why Ping's stock has performed so poorly, look no further than its recent operating results. Whereas most cybersecurity solutions providers have seen revenue grow at a double-digit rate, Ping's third-quarter sales actually fell to $59.9 million from $61.8 million in the prior-year period. The COVID-19 pandemic has disrupted it more than just about any other security provider.

Yet there's good news on multiple fronts. The emergency authorization use approval of two COVID-19 vaccines could help end the pandemic and resolve whatever concerns Ping's prospective customers have.

Ping also benefits from the fact that cybersecurity has become a basic-need service. No matter how well or poorly the economy is performing, hackers and robots don't take a day off. With businesses shifting online and into the cloud due to the pandemic, demand for identity verification solutions is only going to increase.

Lastly, take note that Ping's third-quarter operating results aren't as terrible as some folks would make them out to be. The company's dollar-based net retention rate was 110%, implying that existing clients are upping their spending by a double-digit percentage. What's more, annual recurring revenue jumped 17% from the prior-year period to $242.6 million. 

The way I see it, Ping Identity offers low double-digit sales growth potential for a fraction of the cost of other cybersecurity players. It's a bargain among high-growth tech stocks.

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Biotech stocks are generally fast-growing, innovative companies. Even though cancer-drug developer Exelixis (NASDAQ:EXEL) is up 13% year to date, it's down 11% over the trailing six months, and has shed 23% of its value over the trailing-three-year period (the S&P 500 is up 38% over that time frame).

The reason for the precipitous decline in Exelixis' share price isn't clear. The best guess I can offer is increased competition in treating advanced kidney cancer. Also, Exelixis' year-on-year sales comparisons have been lumpy due to collaboration revenue recognition. However, neither of these issues should concern long-term investors.

Exelixis' key growth driver continues to be Cabometyx, which is approved to treat first- and second-line renal cell carcinoma (RCC) and hepatocellular carcinoma (HCC). By next year, annual sales of Cabometyx are expected to top $1 billion. Increasing demand for the drug, improved diagnostics to detect RCC and HCC, and excellent pricing power will help power Cabometyx's sales higher.

Equally exciting for Exelixis are its many ongoing clinical trials involving Cabometyx. At the moment, close to six dozen monotherapy and combination trials are underway. The most fruitful might be CheckMate-9ER. This trial paired Exelixis' lead drug with Bristol Myers Squibb's immunotherapy Opdivo and led to the combo meeting its primary endpoint in late-stage studies for RCC. As a combination therapy, Exelixis may be able to secure even more of the RCC market.

As one final note, Exelixis' cash pile is soaring. Its substantial operating cash flow has allowed the company to reignite its internal growth engine, and it may encourage Exelixis to make an acquisition.

In short, expect a healthy growth rate for years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.