There have been a lot of compelling new stocks hitting the market over the past year. They may have hit the ground running, but IPOs have been among the hardest hit names during the recent correction for growth stocks. 

Snowflake (SNOW -0.77%), DoorDash (DASH -2.39%), and Palantir (PLTR -1.01%)are all trading at least 40% below their earlier highs as of Tuesday's market close. That's a big fall. These stocks would have to almost double to get back to where they were at their peaks. Let's see why they have promising long-term prospects.

A stack of coins with I-P-O blocks on them.

Image source: Getty Images.

1. Snowflake: Down 49% 

Snowflake was a rock star when it hit the market in September. Underwriters priced the cloud-native data management system provider at $120 a share, but that wasn't enough. It more than doubled out of the gate, hitting $245 at the open. The shares peaked at $429 three months later, but it's now below where it was for its first trade on the exchange.

Growth is still on the menu at Snowflake. Revenue surged 124% for the fiscal year ending in January including a 117% top-line pop in its latest quarter. It had an insane net revenue retention rate of 168% at its last quarterly checkpoint, and that means returning customers are spending 68% more on average than they were a year earlier. You can't deny the incredible growth metrics and momentum. Valuation is an understandable concern, and Snowflake still trades at a market cap that is more than 100 times its trailing revenue. Losing nearly half of its peak value does make it a lot more attractive than it has been in the past. 

2. DoorDash: Down 49%

Another smoking-hot 2020 debutante that has been nearly cut in half since its post-IPO peak is DoorDash. A couple of years ago DoorDash was the distant bronze medalist among restaurant delivery apps. Now it commands half the market. In other words, it's doing as much business as all of its rivals -- including Uber Eats, Postmates, and Grubhub -- combined

If you thought 2019 was a great year for DoorDash with revenue more than tripling, last year business actually accelerated from that 204% top-line explosion. DoorDash saw its top line shoot 224% higher in 2020. The pandemic naturally played an important role. Consumers turned to third-party apps to enjoy restaurant-quality meals while abiding by shelter-in-place orders. The bearish argument here is that folks will flock to their favorite eateries now that the pandemic is showing signs of easing, but in reality DoorDash has spoiled us while dramatically growing its customer base. 

3. Palantir: Down 48%

Palantir isn't growing at the same pace as the other names on this list, but it, too, has shed roughly half of its value. The specialist in big-data business intelligence grew at a 47% clip in 2020, but that was actually more than double the 25% top-line growth it posted a year earlier. 

Palantir helps businesses and the public sector turn the data that they're collecting into actionable information. Investors may have been disappointed to hear Palantir's guidance calling for revenue growth to decelerate in 2021, but that 30% increase target is still better than where it was two years ago. Like most companies, Palantir is also likely being conservative here. With the economy showing signs of life companies and government agencies alike will have the incentive to pay up to get smarter. 

Investing in IPO stocks is risky, but these three names have already been through a lot in recent weeks. They continue to be promising long-term market winners.