If there's one thing that we've learned over the past year, it's that growth isn't always enough to impress investors. A lot of the fast-growing companies have seen their share prices decimated over the past year.
Teladoc (TDOC 3.31%), fuboTV (FUBO 6.72%), and Velo3D (VLD -0.61%) are three stocks posting healthy growth, but all three happen to be screaming bargains right now. They are 79%, 91%, and 50% below their all-time highs, respectively. Let's see why these three out-of-favor growth stocks can bounce back.
Image source: Getty Images.
1. Teladoc
Two years ago, investors couldn't get enough of Teladoc. The leading provider of telehealth -- connecting users at home with doctors, therapists, and other medical pros -- happened to be leading the charge in a niche that was necessary when in-office consultations became dangerous in the dawning of the COVID-19 crisis.
Teladoc was doing so well that it even made a major acquisition, Livongo Health, a leader in high-tech management for folks with diabetes, high blood pressure, and weight management concerns. These days, all of Teladoc is trading for a lot less than it paid for just Livongo Health.
Intensifying competition and the reopening of medical facilities have eaten into Teladoc's appeal with investors, but the same can't be said about patients. Consumers love the simplicity and convenience of getting medical advice at home through video devices. Revenue rose 45% in Teladoc's most recent quarter. Bears arguing that folks are going back to medical buildings for consultations have it wrong, as virtual visits are up a hearty 41%. The red ink will continue for now, but Teladoc's top-line growth defies the naysayers' arguments.
2. fuboTV
Another growth stock that has been hit hard by its lack of profitability is fuboTV. Shares of the live TV streaming service provider have plummeted 90% since peaking during the 2020 holiday season. The story hasn't deteriorated since the stock's peak. In fact, if revenue growth of 98% in the fourth quarter of 2020 is impressive, how can you not like the 119% year-over-year growth it posted for the fourth quarter of 2021?
The biggest reason for the stock's plunge is that the hype behind its gambling industry aspirations have failed to match reality. More than three dozen of fuboTV's available channels stream live sports, so it excited investors when the operator made a pair of small acquisitions that would help it offer predictive fantasy sports games and eventually an actual sportsbook. Gambling stocks in general have taken a hit over the past year as regulatory concerns and a lack of expected growth have failed to materialize.
The core business at fuboTV remains strong. It now has 1.1 million accounts, and it expects to have 1.5 million homes in its rolls by the end of this year. It also recently boosted its basic monthly rate to $69.99, something it wouldn't have done if it didn't think it was engaging enough to keep its customers at a higher price point.
3. Velo3D
Additive manufacturing -- better known as 3D printing -- isn't the hot investing theme that it was a couple of years ago. That doesn't mean that it's less relevant. Velo3D's Sapphire platform is a 3D metal-printing platform that helps industrial companies craft specialized parts that aren't easy to come by otherwise.
A big catalyst for growth for Velo3D this year is the rollout of Sapphire XC, an updated solution that can make parts up to five times faster and at much lower production costs. Demand is strong for the new platform, and Velo3D sees revenue growing from $27.4 million last year to $89 million in 2022. You don't need to be a fan of 3D printing stocks to see that revenue more than tripling is going to turn heads at Velo3D.
