Many stocks that Cathie Wood has been bullish on have been struggling this year. Her ARK Innovation ETF has fallen 52% already in 2022, while the S&P 500 has declined by a more modest 13%. With such a sharp decline, the bearishness has undoubtedly created some attractive deals in the process.
A few Cathie Wood stocks that look especially attractive right now include Ginkgo Bioworks Holdings (DNA 10.60%), Zoom Video Communications (ZM 1.57%), and Coinbase Global (COIN 5.68%). Although these stocks are all down at least 40% year to date and more than 70% off their 52-week highs, here's why they might be worth adding to your portfolio anyway.
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1. Ginkgo Bioworks
Biotech company Ginkgo is a relatively new stock, only going public through a special purpose acquisition company last year. It's down more than 60% since the start of the year, and investors are likely wary of a company that's as deep in the red as Ginkgo is. Its $2.3 billion in losses over the trailing 12 months are admittedly a bit unnerving.
However, the company is still in the very early innings of what could be a promising growth story. It helps its customers program cells and optimizes processes for companies in multiple industries, including agriculture, pharmaceuticals, industrials, and others. It has also partnered with some top names in the healthcare industry, including Moderna, Biogen, and Bayer.
First quarter sales of $168 million were nearly quadruple the $44 million the company generated in the prior-year period. Even on a quarter-over-quarter basis, revenue was 14% higher than what Ginkgo reported in the fourth quarter.
Given its high expenses, investors are taking on some risk with a Gingko investment. But there's plenty of upside for the stock to outperform in the long term given its opportunities. Currently priced at $2.93 a share, it's down 80% from its high of $14.92 and could be a great growth investment for patient investors.
2. Zoom Video
Workers are returning to offices, but that doesn't mean that Zoom won't be able to provide value to its customers anymore. The video conferencing company is working on new initiatives that could help broaden its business. In the most recent quarter, Zoom launched a new whiteboard product that facilitates hybrid work by making it easy for users to make notes and draw up visuals on a call. Video Engagement Center, for example, is a contact center that could transform how businesses engage with their customers.
From a financial standpoint, it's not as if the business is in trouble right now. Zoom continues to generate growth, with sales of $1.1 billion for the first quarter of fiscal year 2023 (period ended April 30), up 12% year over year. The company is not only acquiring new customers, but is also expanding its existing customer base. At the end of that same quarter, Zoom had 198,900 Enterprise customers, representing a 24% year-over-year increase; the net dollar expansion rate for those customers over the trailing 12 months was 123%. Looking ahead to the rest of the year, Zoom is guiding for total revenue of $4.5 billion, which would account for a 9.7% increase from the prior year's $4.1 billion in revenue.
Currently trading at around $110, the stock is down more than 70% from its 52-week high of $406.48. With its new projects and impressive growth forecasts, this stock could be a solid buy today.
3. Coinbase
Technology company Coinbase allows users to trade crypto on its exchange. While there is much excitement around crypto's potential, the area is quite volatile, and Coinbase's stock can sometimes follow the direction of Bitcoin (BTC -0.60%). But it's worth noting that Coinbase's business isn't entirely dependent on a single digital currency.
A year ago, for instance, Bitcoin accounted for 41% of the company's transactional revenue. In Coinbase's most recent quarter (ending March 31), that percentage fell to 25%, just a couple of points higher than Ethereum's share. Other crypto assets were responsible for 52% of its transaction revenue. And while monthly transacting users of 9.2 million for the period were down from 11.4 million in the previous quarter, on a year-over-year basis that metric is up more than 50%.
Net revenue of $1.2 billion in the first quarter declined by 35% year over year, but management stated bluntly in its letter to shareholders that it expects volatility due to the changing prices in crypto: "We may earn a profit when revenues are high, and we may lose money when revenues are low, but our goal is to roughly operate the company at break even."
Coinbase's volatility will likely scare off risk-averse investors, but if you're bullish on crypto, this is another growth stock that could be worth investing in right now. Shares of this crypto-focused company are down 80% from their 52-week highs, making it a screaming deal for those willing to withstand the current ups and downs.
