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3 Stocks to Buy Before You Kiss 2021 Goodbye

By Rick Munarriz – Dec 30, 2021 at 7:52AM

Key Points

  • Crocs is growing fast and trading for just 13 to 14 times forward earnings.
  • Zoom is still posting double-digit growth, but its shares are trading 70% below their all-time highs.
  • The restaurant industry is leaning on Toast to thrive in the new normal.

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The clock is ticking until the final closing bell of the year. Position your portfolio with promising growth stocks before 2022 arrives.

It's been a wild year, and we're now just two closing bells away from putting 2021 away for good. A lot of quality stocks bubbled up to the surface, but a lot of quality names also got even cheaper as the final few weeks played out.

Crocs (CROX 1.10%), Zoom Video Communications (ZM 2.50%), and Toast (TOST 4.29%) are three names that I see stepping up as big winners for 2022. You can wait until next year to see if I'm right, or kick the tires to see if they're right for you now.

Four friends holding 2022 sparklers.

Image source: Getty Images.


This has been a great year for Crocs shareholders. The maker of comfy resin shoes has seen its stock more than double this year, but those same shares also retreated nearly 30% since peaking in mid-November. The footwear maker has overcome its tag as faddish several times over the past 20 years, and it's doing so again with its fourth-consecutive year of impressive growth.

Crocs has emerged out of the pandemic better than ever. Comfort has become fashionable, and celebrities including Ariana Grande, Nicki Minaj, Justin Bieber, and even Helen Mirren have made red carpet appearances and social media posts donning a pair of Crocs.

This year has been particularly satisfying. Following back-to-back years of 13% revenue gains, Crocs has blown through the ceiling with a 77% top-line surge through the first nine months of 2021. 

The acceleration isn't sustainable. Crocs sees revenue exceeding 20% in 2022. However, keep in mind it also was modeling 20% to 25% top-line growth for 2021 when the year began. Momentum changes things. 

You would expect a company with this kind of stellar growth to trade at a premium to the market, but that's not the case. It's fetching just 14 times next-year's projected earnings.

The stock took a hit last week after announcing a $2.5 billion deal for Hey Dude Shoes, a fast-growing footwear maker that's gaining traction with younger consumers. The market may have taken this as a sign that Crocs was struggling to sustain organic growth, but this was a smart deal that will actually be accretive to earnings, revenue growth, and operating margin. B. Riley analyst Susan Anderson feels that Crocs will now earn more than $10 a share following the deal, pricing the stock at less than 13 times forward earnings. 

Zoom Video Communications

Have you noticed that, even though the U.S. is hitting record COVID-19 case counts, the original growth stocks that thrived in the pandemic aren't moving higher? Zoom was the initial market darling of the new normal, but now, shares of the videoconferencing specialist are trading nearly 70% below the all-time high it hit 14 months ago.

Business has undeniably slowed at Zoom, but it's not shrinking. Revenue rose 35% in its latest quarter, and guidance calls for the pace to slow to a 19% increase for the current quarter.

Remember when Zoom was barely profitable and trading for more than 100 times revenue when it took off in the early days of the pandemic? The company is now fetching 14 times trailing top-line results and less than 50 times earnings.

Investors selling at a loss right now to lock in tax breaks are adding insult to injury, but Zoom is priced ripe for a turnaround. Zoom isn't going away from the tool belt of companies embracing hybrid workforces, and -- unfortunately -- the COVID-19 crisis doesn't seem to be going away anytime soon. 


In a year of broken IPOs, few are more perplexing than Toast. Shares of Toast are trading just below their IPO price of $40, even though it has hit the ground running. More than 48,000 restaurants use Toast's cloud-based platform to process orders, manage inventory levels, and play nice with third-party delivery apps.

The pandemic has helped accelerate adoption of Toast, as restaurants lean on its tech to help teach an old industry to thrive in today's world with new revenue streams that are essential for a concept to survive. Revenue rose a modest 24% in 2020, largely as restaurant operators saw business dwindle during the first few months of the pandemic. Things are tastier now, and Toast has posted a 105% pop in revenue through the first three quarters of 2021.

Investing in restaurant stocks is risky. Buying Toast is a smart way to play the industry's most successful operators. Like its namesake corporate handle, Toast revenue should keep popping up in 2022. Buying Toast below what IPO investors had to pay three months ago sounds like a tasty order. 

Rick Munarriz owns Crocs. The Motley Fool owns and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

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