2 Monster Growth Stocks to Buy Now and Hold Forever

Investors have learned a difficult lesson through the first half of the year: The stock market can go down very quickly. In fact, the broad S&P 500 has slipped over 14% from its high, putting the benchmark index squarely in correction territory. However, historical data shows the stock market goes up more than it goes down. Despite the recent sell-off, the S&P 500 is still up 221% over the past decade.

That information hits on the importance of a long-term mindset. Stocks are unpredictable in the short run, but the market has been a wealth-building machine over longer periods of time. With that in mind, here are two growth stocks to buy and hold forever.

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1. Roku: The most popular streaming platform

Roku (ROKU 0.15%) is the gateway to streaming entertainment. Its platform accounted for 31% of total streaming time worldwide in the first quarter, meaning it holds nearly twice as much market share as its next closest rival.

That success is built on brand authority. Roku has become synonymous with user-friendly streaming devices and smart TVs, and Roku OS is the only operating system purpose-built for televisions. Management believes that creates a better viewer experience compared to repurposed mobile operating systems like Amazon Fire OS.

To further distinguish itself, Roku is pouring money into its ad-supported streaming service, The Roku Channel. It features a growing array of free content, including hundreds of live linear channels and thousands of movies and shows. The company has also debuted dozens of original titles on The Roku Channel, and those efforts have sent its popularity soaring. In fact, The Roku Channel ranked among the top five channels on the platform in the U.S. in the first quarter.

As a whole, Roku's strong market position has translated into solid financial results over the past two years.

Data source: YCharts. TTM = trailing 12 months. CAGR = compound annual growth rate.

As a caveat, growth in active accounts and streaming hours decelerated to 14% in the first quarter. However, Roku still outpaced the 10% growth in viewing time seen across the broader streaming industry.

Roku has plenty of room to grow its business. Connected TV ad spend is expected to reach $100 billion by 2030, up from $21 billion in 2021, according to BMO Capital Markets. However, Roku's adtech platform helps marketers deliver targeted ad campaigns across televisions, mobile devices, and desktops, so its real market opportunity is even bigger.

Additionally, Roku is pursuing new and innovative means of monetizing its business. The company recently launched shoppable ads, making it possible for brands to sell products through the platform. Roku's digital payments tool, Roku Pay, streamlines the buying experience for consumers. If successful, that move could help Roku tap into the e-commerce and digital payments markets.

Currently, shares trade at 4.1 times sales -- an absolute bargain compared to their three-year average of 15.9 times sales. That's why now looks like a good time to buy this monster growth stock.

2. Etsy: A niche leader in e-commerce

Etsy (ETSY -2.17%) has established itself as a key player in the e-commerce industry. It ranks as the fourth-most popular online marketplace in the U.S. as measured by monthly visitors, and its focus on handcrafted and custom goods distinguishes it from retailers like Amazon. In fact, in an internal survey, 87% of buyers said Etsy has products they can't find anywhere else.

The company has garnered that reputation by simplifying commerce for small sellers. Specifically, Etsy provides educational resources, payment and shipping services, and tools for inventory management, marketing, and analytics. Its platform also allows sellers to communicate directly with customers, which makes it possible to personalize orders and build lasting relationships with buyers.

That value proposition has brought 5.5 million active sellers and 89 million active buyers to the marketplace, forming the foundation of a powerful network effect. In other words, each new seller brings more inventory to the platform, creating value for every buyer -- and each new buyer brings more purchasing power to the platform, creating value for every seller.

That virtuous cycle has fueled monster financial results over the past two years, despite a recent deceleration driven by tough macroeconomic conditions.

Data source: YCharts. TTM = trailing 12 months. CAGR = compound annual growth rate.

Etsy has plenty of room to grow its business. The company puts its addressable market at $466 billion, but that figure will keep rising as online shopping becomes more popular. To capitalize on that sizable opportunity, Etsy is working to drive buyer engagement through personalized search results and better post-purchase support. The company has also expanded its marketing efforts to new channels like TikTok and new geographies in Europe.

Currently, shares trade at five times sales -- significantly cheaper than their three-year average of 11.7 times sales. That's why now looks like a good time to buy this beaten-down growth stock.