Investors hungry for stocks they can buy with modest sums have a lot of great options right now. That's because many of the growth stocks that soared in the pandemic's early days have fallen hard.
Not all of the stocks that tanked this year deserve to bounce right back but more than a few are primed for a rebound. Shares of Roblox (RBLX 4.06%), Global-E Online (GLBE 2.32%), and PubMatic (PUBM -0.25%) are currently trading for $35 or less and all three have a good shot at delivering eye-watering returns to investors who buy and hold their shares for the long run.
Right now you can scoop up shares of Roblox for a little less than $35 per share. That's about 75% less than you would have paid for this metaverse stock when it was at its peak last November.
Roblox shares have been beaten down because the company's incredible growth rate during the peak of pandemic-related lockdowns hasn't continued along the same trajectory in 2022. This February, the number of daily active users climbed 28% year over year to 55.1 million. Unfortunately, average bookings per daily active user fell by around 24.5% compared to last February.
With fewer kids and parents forced to stay home from school and work, it's no wonder that Roblox's user base is a little less engaged. This probably isn't a reason to avoid the stock, especially at its recently discounted price.
Shares of Roblox are trading at around 9 times trailing sales, which is incredibly low for a company with sales figures that more than doubled last year. The 60% year-over-year growth rate the company estimated in February is a relative slow down, but it's still fast enough to drive the stock to new peaks if it continues.
Shares of Global-E Online have been beaten down to around $25 at recent prices. That's about 61% less than the e-commerce stock was trading for at its peak last December.
The stock is in freefall due to external economic factors that investors expect to pressure e-commerce and the adoption of cloud-based business solutions. Looking at the company's recent performance, it seems the fear is overblown.
Global-E Online helps merchants sell their goods to a much larger international customer base than those merchants could ever hope to reach on their own and demand is shooting through the roof. The total value of merchandise sold with help from Global-E's cloud-based products soared 87% year over year in 2021. At just $1.45 billion, though, it's clear this company has only scraped the surface of its total addressable market.
We can reasonably expect Global-E's international e-commerce footprint to continue expanding by leaps and bounds. Earlier this year, the company expanded its strategic partnership with Shopify to offer its merchants headquartered in North America a chance to reach a larger international audience.
Shares of this online advertising business soared following its stock market debut in late 2020. Since peaking in early 2021, though, the stock has tumbled by 67% to around $23 per share.
PubMatic operates a platform that lets advertisers purchase ad impressions on websites, smart TVs, and smartphone apps. PubMatic contracts with ad buyers who bid on available space, but PubMatic receives payments from its partnered publishers who are eager to sign up. The company monetized connected TV inventory from 167 publishers in the fourth quarter, up from 154 publishers during the third quarter.
PubMatic's operation is a lucrative one with net income that worked out to 25% of revenue in 2021. Last year was the company's ninth consecutive year of profitability with earnings that more than doubled to an even $1.00 per share.
This year the company expects to more than double its roster of engineers who support PubMatic's global infrastructure. There are around 300 at the moment and this figure will swell as the company fills a new engineering hub in Pune, India that will house around 800 employees.
If the current hiring spree pressures earnings, as expected, the stock could tumble further this year. On a longer timeline, though, this company's rising share of a large and growing market for programmatic advertising gives PubMatic a great chance to produce market-beating gains for patient investors.