The broad market may have steadied since its January drubbing. But stocks are still deep in the red for the year. The S&P 500 currently stands 5% below where it ended 2021, and several familiar names have fallen much more. A handful of tickers have even entered bear market territory with losses in excess of 20%.

There may well be more downside in store for the stock market, which would create a headwind for all stocks regardless of how much they've already suffered. There are a couple of growth stocks, however, that have already fallen too far to simply stand on the sidelines here.

Consider buying PayPal Holdings (PYPL 0.33%) and Chewy (CHWY 2.21%) at their sharply depressed prices.

PayPal

Most stocks have lost ground this year, but PayPal shareholders have been downright tortured of late. PayPal shares are down nearly 60% since July's peak because of...well, that's a good question. To be clear, competition is creeping onto its turf from every direction. Credit card middlemen Visa and Mastercard continue to beef up their mobile wallet capabilities that give consumers more choice and flexibility outside of PayPal's payment ecosystem.

Mastercard, for example, now allows certain cardholders to use Bitcoin to make everyday consumer purchases. Visa offers a variety of point-of-sale solutions to small businesses at the same time it's working closely with key technology partners to turn smartphones into digital wallets. Meanwhile, Netherlands-based Adyen continues to grow, following in PayPal's exact payment footsteps.

Don't confuse "new," however, with "better." PayPal believes it's got an answer for all of these competitors' efforts.

Clock face reading "time to buy."

Image source: Getty Images.

Granted, last quarter's earnings miss only made it easier for investors to continue shedding their PayPal shares. And in the words of Jefferies analyst Trevor Williams, the company's 2022 outlook "lacks anything redeeming" as well. That take alone is arguably responsible for the stock's near-30% tumble just since last week's release of the quarterly numbers in question.

Largely being ignored by investors, however, is the fact that PayPal is still the dominant name in the digital payment industry, which is still growing very well with a lot of room to run. Technology market research outfit Technavio estimates the global digital payment market will grow at an annualized pace of more than 17% through 2026, which is more than enough opportunity for PayPal even with ramped-up competition.

Sure, stepping into a trade here seems more than a little bit daunting. The stock feels like it's in a free fall that was further accelerated following last week's fourth report. Jumping in now may be like catching a falling knife.

This is one of those sell-offs, however, that's gotten so big so quickly that a hard landing likely looms much sooner than later. Bolstering any brewing bounce is this year's revenue growth estimate of 16% followed by next year's expected top-line improvement of 20%. Next year's projected per-share profits should be nearly 30% above last year's level.

Chewy

Although online pet store chewy.com has been around for years, it wasn't until the pandemic took hold that it moved into the spotlight. Consumers were looking for a way to feed and entertain their animals without stepping foot in a brick-and-mortar store, and Chewy quickly became a preferred provider.

The stock generated comparable interest, rallying more than 400% from its late-2019 low to its early 2021 high. That's when the market realized it had gotten a bit overzealous with its buying. Shares have been sliding lower ever since -- except that the selling has been almost as indiscriminate as the buying was. While up 30% in just the past couple of weeks, Chewy shares are still down an incredible 60% from that early 2021 peak.

This weakness is, of course, an opportunity for long-term growth investors. Although not yet profitable, the company's projected sales growth of nearly 25% should more than cut the company's loss in half, and next year's top-line improvement of almost 19% is expected to cut the loss in half again. A swing to a profit is on the radar for 2024.

The market, however, will likely reward progress toward that goal between now and then. A little bit of profitability should go a long way too. Chewy shares are presently priced at just over 2.1 times their trailing twelve-month revenue. For perspective, the S&P 500 is valued at around 3.0 times its historical sales.

And if you think pet mania is an aging story that saw its heyday back in the 90s and has been slowing ever since, chew on this: Mordor Intelligence says the global pet-supply market is going to grow by more than 7% annually over the next five years. As online shopping itself continues to grow -- due to its convenience -- Chewy is positioned to capture more than its fair share of that growth.