There's little for investors to be excited about right now. Nearly every sector has taken it on the chin, the S&P 500 dipped into a bear market last month, and inflation is still near a multi-decade high.
Both short-term and long-term investors feel the pain. But the difference between them is their perspective on the future. The first group will focus on the doom and gloom, while the second will look for new buying opportunities.
If you fall in the latter category, here's why you should consider buying Snowflake (SNOW 1.88%), Airbnb (ABNB 0.99%), and Nio (NIO 3.13%).
Image source: Getty Images.
1. Snowflake
What Snowflake does isn't quite as exciting as how fast it's growing. It's a cloud-based data storage and analytics company that, despite its recent share price drop, is growing very fast.
Here are some highlights from the most recent quarter (reported on May 25):
- The company's product sales increased 84% year over year, to $394.4 million.
- Snowflake's total customers reached 6,322, up 40% from the year-ago quarter.
- The company's net revenue retention rate (a metric that measures how much more a customer spends with Snowflake from the previous year) is a very impressive 174%.
- There are now 206 Snowflake customers with trailing-12-month product revenue greater than $1 million -- up 98% year over year.
When you add all of this together, you get a company that is growing revenue at a very healthy clip, generating more revenue from existing customers, and increasing its high-dollar customer base to boot.
So why is Snowflake a buy right now? Because following its blockbuster IPO in September 2020 and subsequent share-price surge during the height of the pandemic, Snowflake's shares now trade far below the company's opening price from nine months ago.
That means that savvy investors who are digging around for a high-growth stock at a discount just found a gem in the bargain bin.
2. Airbnb
I've been beating the Airbnb drum ever since I bought the stock last year. Despite its recent sell-off, there's still plenty to love about the beaten-down growth stock.
Consider some of the solid results from the company's first quarter (reported on May 3):
- Total revenue spiked 80% from the same period in 2019 (pre-pandemic quarter comparisons are the most accurate gauge of growth for travel stocks) to $1.5 billion.
- Airbnb's nights and experiences booked have surpassed pre-pandemic levels, hitting 102 million in the first quarter and marking the first time the company topped 100 million of these bookings in a quarter.
- Net losses are improving, with Airbnb's first-quarter net loss of $19 million in the quarter coming ahead of a loss of $292 million in the first quarter of 2019.
Those are all impressive figures, and Airbnb's CEO Brian Chesky believes that even brighter days are ahead. He said on the company's recent earnings call that this travel year is going to be even bigger than last year, because in 2021 the delta variant of COVID-19 and other strains curbed some travel.
With Airbnb's current growth and the vast majority of travel restrictions in the rearview, the stock is well-positioned to continue tapping into unique travel experiences. And with its share price down about 30% over the past six months, now looks like a good time to pick up some shares.
3. Nio
The share price of this Chinese electric vehicle (EV) maker reached dizzying heights in 2021 when investors saw nothing but dollar signs for anything EV-related. Now, not so much. The company's share price is down 53% over the past year.
Down, but not out, as they say. The potential Nio has in the EV market is simply too large to ignore. China is the largest automotive market in the world and EV sales are rapidly expanding there. An estimated 20% of all new vehicles sold in the country will be battery-powered this year, up from 15% in 2021.
Part of that growth came from the Chinese government giving tax breaks for owning EVs and offering tax credits for EV purchases as well. Some of these incentives were set to expire this year, but with the Chinese government worried about an economic slowdown, it's likely they'll keep them around in some form at least until next year.
And China isn't the company's only opportunity. Nio sells its EVs in Europe as well and could eventually expand to the U.S. Several recent reports have shown that Nio has open job positions in the U.S., including for vehicle production.
Nio is putting up impressive numbers, even if macroeconomic pressures have slowed some of its recent growth. Here's what the company's full-year 2021 results looked like:
- Vehicle deliveries soared 109% to 91,429.
- Revenue from vehicle sales reached $5.2 billion, up 118% from the year-ago quarter.
- Nio improved its vehicle margins from 12.7% in 2020 to an impressive 20.1% in 2021.
There's no denying that supply chain shortages and production slowdowns because of China's zero-COVID policy have caused some volatility in Nio's share price. But with the company already growing quickly in the world's largest EV market, grabbing some shares of this company could look like a very wise decision in the next few years.
