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3 Growth Stocks Down Over 20%

By Jose Najarro - May 11, 2021 at 11:45AM

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Here are a few reasons to keep an eye on these stocks.

In today's video, I look at Zillow Group (ZG 4.31%) (Z 4.64%), MercadoLibre (MELI -0.06%),and  Social Capital Hedosophia Holdings Corp. V (IPOE), the SPAC that will merge with SoFi. These three growth stocks are down over 20% from their 52-week highs, and below I share three reasons why you should add them to your watch list.

Three Reasons to Add Zillow to Your Watch List.

  1. For Q1 2021, Zillow reported total revenue growth of 8% Y/Y. The yearly increase in revenue came from the 35% Y/Y growth in its IMT segment and 169% Y/Y growth of its mortgage segment. Even though Zillow sees a reacceleration in the Homes segment, it was still down 9% Y/Y.
  2. Zillow has a strong balance sheet with over $4.7B in cash and short-term investment and only $2.3B of debt.
  3. Margins are improving for Zillow. The company has finally reported positive TTM profit margins.

Three Reasons to Add MercadoLibre to Your Watch List.

  1. For Q1 2021, MercadoLibre reported strong FX neutral Y/Y revenue growth in its three main markets, 223% growth in Argentina, 139% growth in Brazil, and 148% growth in Mexico.
  2. MercadoLibre recently announced that it is investing $1.1B in Mexico as the e-commerce market continues to boom throughout Latin America.
  3. MercadoLibre is getting closer to achieving GAAP profitability. In Q1 2021, MercadoLibre reported net margins of roughly -0.3%.

Three Reasons to Add IPOE to Your Watch List.

  1. SoFi has recently announced that the merger should be complete, and the company will be trading under the new ticker "SOFI" by June 1.
  2. SPACS have taken an enormous hit with the most recent correction. IPOE stock price is down roughly 35% from its 52-week high.
  3. 2021 Guidance for SoFi shows 58% Y/Y growth in revenue and profitable adjusted EBITDA margins for the first time.

Click the video below for my full thoughts. 

*Stock Prices used were the closing prices of May 7, 2021. The video was published on May 8, 2021. 

Jose Najarro owns shares of MercadoLibre. The Motley Fool owns shares of and recommends MercadoLibre, Social Capital Hedosophia Holdings Corp. V, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Mercadolibre, Inc. Stock Quote
Mercadolibre, Inc.
$1,024.25 (-0.06%) $0.56
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$38.98 (4.31%) $1.61
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$38.78 (4.64%) $1.72
Social Capital Hedosophia Holdings Corp. V Stock Quote
Social Capital Hedosophia Holdings Corp. V

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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