While cheap stocks are often cheap for a reason, it's not a universal rule and it's in the exceptions where investors can find opportunity. Sometimes businesses have a hiccup that can be remedied or the market has read the situation wrong.

Whatever the reason, Purple Innovation (NASDAQ:PRPL), Zynga (NASDAQ:ZNGA), and Bed Bath & Beyond (NASDAQ:BBBY) have been beaten down by the market and trade well below recent highs. Yet there's good reason to believe these are just temporary setbacks for these value stocks. Read on to find out why these three consumer goods stocks are poised for a serious comeback.

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Don't sleep on this stock

Eric Volkman (Purple Innovation): My potential consumer goods comeback kid is Purple Innovation, the company that makes the widely advertised Purple mattresses.

While the company's products get good reviews and its business is making notable gains, it's been dinged by investors lately. This is due to a blend of negative factors including manufacturing hiccups and a general investor move away from home-related stocks on anticipation that the coronavirus pandemic will eventually subside. A recent secondary share issue that suddenly flooded the market with company stock didn't help either.

As a result, Purple's shares have dived by 23% year to date, in contrast to the S&P 500 index's 18%-plus gain across that stretch of time.

Even a good second-quarter earnings report, delivered last week, didn't move the needle on the stock much. And it should have -- the company convincingly beat the collective analyst revenue estimate, not least because of a 233% year-over-year leap in wholesale revenue. It fell short of profitability projections, nevertheless it did manage to flip into the black on the bottom line with a $2.6 million profit.

Starting as an online, direct-to-consumer business, Purple has lately and successfully been shifting some of its efforts to the wholesale channel (i.e., third-party stores like Macy's). This gives it an advantage over next-generation mattress makers, many of whom are staying firmly in the DTC camp. Assuming demand is sufficiently robust (which it clearly is for Purple), the more sales channels a company can shift its products to, the better.

Since its mattresses use a proprietary material (essentially a specialty polymer), the company has to use a proprietary machine called Mattress Max to manufacture them. It isn't cheap or easy to develop and build Mattress Maxes, a situation that has limited Purple's true potential.

Happily, in that Q2 earnings release CEO Joe Megibow said of the manufacturing issues, "While this headwind carried into the third quarter, I am pleased to report that we exited the month of July with production back at planned levels."

He added, "We are confident in delivering a solid finish to 2021 and progressing toward our long-term targets of $2 billion to $2.5 billion in annual net revenue and mid-teens adjusted EBITDA margins over the next three to five years."

Investors shouldn't have to wait long for meaningful growth. Purple anticipates its full-year revenue will come in at $820 million to $850 million; the analysts following the stock are estimating on the low end of that range. Even if the company makes only that minimum, it would still represent a rich 26% improvement over the 2020 figure. 

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Game over? Not even close

Keith Noonan (Zynga): Zynga has been putting together an impressive growth push thanks to acquisitions and internal development initiatives, but the market was resoundingly negative on the company's second-quarter earnings release. The video game publisher's stock has dipped roughly 16.5% since its Q2 release on Aug. 5, with investors moving out of the stock due to engagement data and guidance that fell short of expectations. While there are signs that Zynga's growth may be decelerating in the near term, investors who take a buy-and-hold approach could still see fantastic returns from the stock. 

Video game companies enjoyed favorable engagement trends as a result of the pandemic, with shelter-in-place and social distancing conditions prompting people to seek entertainment and socialization through digital channels. With pandemic-related restrictions easing in many territories, Zynga and other players in the industry are facing challenging comparisons as they move through this year's earnings reports. Zynga is also lapping some huge acquisitions it made last year, and some of the legacy titles in its lineup may be in need of new content updates to drive engagement.  

There were admittedly some soft points in the company's recent earnings report, and it's not unreasonable to be concerned that growth will be uneven through the remainder of the year. Don't sweat these points. The mobile games market looks poised to enjoy secular growth tailwinds through the next decade and beyond, and Zynga is well positioned to take advantage of emerging opportunities including augmented reality and in-game advertising. The company has amassed a strong collection of development studios and franchises, and its Q2 results and guidance aren't particularly concerning in the broader scheme of things. 

Zynga now has a market capitalization of roughly $8.9 billion and is trading at approximately 23 times this year's expected earnings and 3.2 times expected sales. That looks like an attractive valuation for a category leader operating in an industry that still has huge long-term growth potential, and I think the stock has what it takes to serve up big wins for patient investors.

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Sticking closer to home is a winning strategy

Rich Duprey (Bed Bath & Beyond): The home improvement boom of the pandemic looks like it may be coming to an end. Although retailers are reporting earnings that beat Wall Street estimates, their guidance for the rest of the year increasingly seems muted. Bed Bath & Beyond is slightly different. It continues to see gains made over the big run up it enjoyed in 2020 while also benefiting from an improving profit situation. The home goods retailer expects low single-digit sales gains over the year-ago period and sequential adjusted gross margin improvement from earlier this year.

It wasn't all that long ago Bed Bath & Beyond was careening toward disaster, but activist investors cleaned house, brought in a new management team, jettisoned all non-core businesses, and focused instead on what they knew best. The turnaround has been remarkable.

Bed Bath & Beyond has posted four consecutive quarters of rising sales, now looks solidly profitable again, and is generating substantial amounts of free cash flow.

That's good for long-term investors looking for a stock poised for a serious comeback. Bed Bath & Beyond's stock trades at just 12 times next year's estimated earnings, a fraction of its sales, and just seven times the cash profits it produces. 

That's especially key because the home goods chain is readily able to produce prodigious amounts of free cash flow, or the money a company has left over from paying the bills that it can use to invest in the business. Even when it looked as though it was circling the drain it was able to produce nearly $1 billion worth of cash profits. 

The home goods retailer got caught up in the meme stock trading frenzy earlier this year, and though there's still significant amounts of shares sold short, the r/WallStreetBets subreddit crowd seems to have moved on to other targets. Despite the hype, Bed Bath & Beyond is one meme stock that still has a future.

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.