While many fast-growing stocks have struggled price-wise in the back half of 2021, most have maintained rapid business growth anyway and that will likely lead to continued success over many years and eventual stock-price recovery. Helping in that recovery is if these companies can develop into market leaders. 

Both Coupang (CPNG -1.31%) and Doximity (DOCS 0.07%) have generated solid growth this year while dominating their respective industries. And yet shares of both stocks are down more than 40% off all-time highs set earlier this year. Now might be a nice buying opportunity to add these two dominant businesses to your portfolio. Let's take a closer look at the reasons why.

Person shopping online looking at their phone.

Image source: Getty Images.

1. Coupang: The customer-centric company

While it's unlikely that U.S. readers of this article have experienced Coupang's service, some aspects of what the company has to offer might entice you to move to South Korea. This international e-commerce company makes Amazon's two-day delivery look slow. Coupang offers same-day or next-day delivery to nearly all of the orders it gets for free and if you place an order before midnight, you will have it on your doorstep by dawn the next morning. 

The company's impressive logistics help it accomplish this. Roughly 70% of South Korean citizens live within seven miles of a Coupang logistics center, making it easy to pick, pack, and ship orders quickly. This incredible level of customer service has enticed roughly one-third of South Korea's population to become active customers, which points to its dominance in the region.

The company has been around since 2010 but only became a publicly traded stock in March. It competes with eBay's GMarket and Amazon, but what these companies are unable to achieve is Coupang's edge: unrivaled customer service and speed. With other services like grocery delivery, Coupang is quickly becoming the primary e-commerce and delivery hub for Korean consumers. 

Coupang's quarterly revenue hit $4.6 billion (a 48% jump year over year), but the company wants to continue growing. It recently launched services in Japan and Taiwan, and there are also rumors that it is planning on competing in Singapore -- squaring up against Sea Limited

The high level of competition has forced Coupang to pay up for advertising and other marketing expenses. Those expenses exceeded $1 billion in Q3, and with gross margins of just 16%, the company's balance sheet is definitely in the red right now. Its Q3 net loss was over $323 million, and the expenses will likely rise until it gains market share in these regions. Coupang probably won't see net positive income for a few years as it emphasizes service expansion and gaining market share in its new geographies.

With the stock price down from highs set just after its IPO, it would seem that paying just 2.5 times sales for a company with this much dominance in its home market and promising international efforts could be a steal. If Coupang can bring its logistics edge to other countries, its impressive growth should continue for many years to come, making this investment appealing for 2022 and beyond. 

2. Doximity: A new kind of social media

Doximity's online networking service allows doctors and nurses to collaborate with other healthcare providers and patients in a workplace setting. Users also have access to curated medical news as well as telehealth and case collaboration tools that help them stay up to date on the latest drug research and news. 

Doximity management says its reach extends to over 80% of doctors and 90% of medical students. High engagement from this demographic has led to advertising space within its various services becoming incredibly valuable -- especially for pharmaceutical companies looking to advertise their products to doctors. While just 600 drug makers advertise on Doximity, one-third of them are spending at least $100,000 annually, and a handful of them are spending at least $1 million annually.

While the medical communications site has low switching costs for its users, there are network effects. The more users on the platform, the easier it is for other doctors or medical students to collaborate professionally and expand their professional careers. This decreases the chance of doctors leaving the platform for alternative sources because the community they want to interact with is already on the app. This edge is the primary reason Doximity can charge such premiums for the advertising space on its platforms. 

Because Doximity already has strong adoption from healthcare professionals, it does not have to spend as much on marketing and R&D. This, along with the company's 89% gross margins, has allowed it to do things like generating a net income of $36 million on gross revenue of $79.4 million in its most recent quarter.

To invest in this dominance and profitability, investors will have to pay up a bit. The company trades at 36.6 times sales and 188 times earnings, and that's despite the stock price being down about 53% from 52-week highs on some concern about a drop in growth expectations. But if the company can keep its users on the platform, advertising revenue will continue to be sold at a premium. Doximity's great products and network effect will be able to retain users long term, meaning advertisers likely won't be leaving either. This should result in impressive success for Doximity in 2022 and beyond.