In today's video, I look at the following growth stocks: Shopify (NYSE:SHOP)Twilio (NYSE:TWLO), and Redfin (NASDAQ:RDFN). The stock prices for each have dropped roughly 25% to 48% from their 52-week highs. Below I share three bullish reasons for each stock on why you should add them to your watch list.

Three reasons to add Twilio to your watch list

  1. Twilio reported 62% year-over-year revenue growth for the first quarter of 2021, and more than 235,000 active customer accounts compared to 190,000 at the same time last year.
  2. Twilio has strong fundamentals as it is positive in cash flow from operations and has substantially more cash and short-term investments than debt. 
  3. Twilio's forward price-to-sales ratio has dropped to roughly 15.4, making it more attractive compared to a few months ago when it reached levels of over 23.

Three reasons to add Shopify to your watch list

  1. Shopify reported 110% year-over-year revenue growth and 62% year-over-year monthly recurring revenue growth for the first quarter of 2021. 
  2. Shopify has exceptional fundamentals as it is profitable, positive in cash flow from operations, and has substantially more cash and short-term investments than debt. 
  3. Shopify's forward price-to-sales ratio has dropped to roughly 22.7, making it more attractive compared to a few months ago when it reached levels of over 35.

Three reasons to add Redfin to your watch list

  1. Redfin reported 40% year-over-year revenue growth and 229% year-over-year gross profit growth for the first quarter of 2021. 
  2. Redfin has strong fundamentals as it is positive in cash flow from operations and has more cash and short-term investments than debt. 
  3. Redfin's forward price-to-sales ratio has dropped to roughly 2.5, making it more attractive compared to a few months ago when it reached levels of over five.

Click the video below for my full thoughts. 

*Stock prices used were the closing prices of May 14, 2021. The video was published on May 15, 2021. 



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.