Not every stock had a hot July. Some of the market's more scintillating growth businesses saw their shares take steps back last month. Opportunity is knocking.
Shares of Pinterest (PINS -2.86%), Coupang (CPNG 1.88%), and Coinbase Global (COIN -9.09%) fell last month. They are trading between 35% and 47% below their 2021 highs. Let's go over why I think these are three stocks with good chances to get back on track in August.
Image source: Getty Images.
One of last month's biggest losers was Pinterest, shedding more than a quarter of its value in July. The biggest hit came on the final trading day of the month, as Pinterest's stock plummeted 18% after it posted disappointing financial results.
Revenue was well ahead of expectations, but the market was shocked by a 5% year-over-year decline and a 7% quarter-over-quarter dip in U.S. monthly active users. Pinterest was an early winner in the pandemic, as folks flocked to the image-focused social platform for recipes, home decor tips, and other crafty inspirations. It's only logical for its audience to be distracted with real-world pursuits as we claw our way out of the COVID-19 crisis. The 7% sequential dip was still something that even shocked the bears.
The good news here is that revenue is still soaring because average revenue per user in the U.S. has more than doubled over the past year. With some unfortunate signs that we're not entirely over the pandemic, we could see a one-two boost where Pinterest usage picks up again with the company's improved monetization skills in place.
Coupang
South Korea's top online retailer has been public for less than five months, but it's already given early investors a wild ride. Coupang stock nearly doubled during its first day of trading, only to give most of those gains back. The shares have plummeted 47% since its intraday peak in its debut, including a 13% decline in July.
There's a lot to like in Coupang. It was doing well before the pandemic, but like many leading online businesses it packed years of growth into 2020. Revenue skyrocketed 91% last year, and that's with South Korea faring better than most of the planet through the crisis. Revenue is still running strong with a 74% top-line surge in this year's first quarter. It reports again next Wednesday, giving investors a great chance to get on if they expect another blowout financial performance.
Coupang is in better competitive shape than you think. It has a fleet of drivers and 100 distribution centers across South Korea, placing it within seven miles of roughly 70% of its potential customers. In short, place an order for groceries of mainstream goods by midnight and it will be at your front door before you wake up. Returns are just as easy as leaving the rejected merch on your porch. Pinterest may bounce back because last month's sell-off was overdone, but Coupang also has an important earnings report that could win back the bulls next week.
Coinbase
Coinbase Global held up better in July than Pinterest and Coupang -- down just 7% last month -- but like Coupang it has shed nearly half of its peak IPO value after hitting the market earlier this year. The leading cryptocurrency exchange enters August nearly 45% below its April high.
What are your thoughts on crypto? Whether you think digital currencies will move up or down in the coming weeks and months it's a fair bet that volatility will be norm. Coinbase feasts on trading volume. Falling crypto prices will naturally weigh on overall interest and demand, but this was a company that began 2021 with an 845% surge in revenue on explosive high-margin profitability. Growth will slow, naturally, but Coinbase should continue to appreciate at a headier clip than crypto prices themselves.
Pinterest, Coupang, and Coinbase may not be hot growth stocks right now, but all three have businesses faring better than their depressed share prices. They are three stocks that have a strong chance at bouncing back in August.
