You wouldn't know it from looking at the major stock market indices, which are sitting at or near all-time highs, but there are many stocks that are still well off their highs. And some of these beaten-down stocks have excellent businesses with growth metrics trending in the right direction. Here are three stocks in particular that are worth a look as we head into 2022.

Company Name (Stock Symbol)

Recent Share Price

% Off All-Time High

Pinterest (PINS -0.15%)



PayPal (PYPL -0.92%)



MercadoLibre (MELI -2.93%)



Data source: YCharts. Stock prices as of 1/3/2022 at 1:30pm EST.

Don't let a short-term shift distract you from fantastic revenue growth

Pinterest has been under significant pressure lately, as you can see in the chart above. Since peaking in early 2021, not only has there been a notable rotation out of high-growth technology stocks, but Pinterest's user base has actually declined a bit in recent quarters.

Sale sign in storefront window.

Image source: Getty Images.

Now, a social media company with a declining active user base might sound like a big red flag, but it's important to take a step back and consider two very important points. First, Pinterest's user decline is likely a temporary headwind caused by the gradual lifting of COVID-19 restrictions rather than any problem with the business itself.

Think of it this way -- until mid-2021 when vaccines became widely available in the United States and in many other countries, people had more time than ever to sit inside and search for ideas on Pinterest. Now that the world is gradually returning to normal, a temporary decline in users isn't a surprise.

Second and most importantly, Pinterest is doing a fantastic job of monetizing its user base. The company's average revenue per user is up 37% over the past year, including 81% growth in average revenue per user (ARPU) from the international user base, which makes up about four-fifths of the total. With international users still generating less than 7% of what the average U.S. user does, there's tremendous revenue growth potential if Pinterest can close the gap.

A fintech behemoth with lots of room to grow

PayPal has declined significantly in recent months, but the company's business is firing on all cylinders. Its total payment volume increased 26% year over year in the most recent quarter and is now over $1.2 trillion on an annualized basis, and more than 416 million active users are on the platform. And excluding the planned wind-down of its eBay (EBAY -1.52%) relationship, PayPal's revenue grew by 25% in the third quarter of 2021 -- remarkable growth for such a massive business.

However, don't make the mistake of thinking PayPal doesn't have any room to grow. Worldwide cashless payment and money transfer volume is estimated to be about $185 trillion, and PayPal has been incrementally adding revenue streams through smart acquisitions.

A massive market opportunity

MercadoLibre is often called the "Amazon (AMZN -2.64%) of Latin America," but even that title might not do the company justice. I'd go so far as to call it the Amazon, PayPal, and maybe even the eBay and Square (Block) (SQ -0.30%) of Latin America, and at much earlier stages of each company's business cycle.

On the e-commerce side of the business, MercadoLibre's marketplace saw $7.3 billion in gross merchandise volume in the third quarter, up 30% year over year on top of already massive pandemic-fueled growth the year before. And on the fintech side, MercadoLibre's total payment volume grew by 59% year over year and is now more than $80 billion annualized. These numbers sound impressive, and they certainly are, but they represent about 4% and 7% of Amazon's and PayPal's numbers, respectively.

Invest with the long term in mind

To be perfectly clear, while all three of these companies are fantastic businesses with excellent growth potential, that doesn't mean they're going to be home run investments overnight. I have no idea what they'll do over the next few months (or even the next year or two), and if conditions aren't favorable for growth stocks -- say, interest rates continue to rise faster than expected -- they could certainly decline further in the near term.

I'm confident that investors who measure their returns in decades and buy these stocks now will be very glad they did. But be prepared for some ups and downs along the way.