Stocks that fall by as much as 90% do carry inherent risks, but given that investor sentiment toward the technology sector is so negative right now, there's no doubt some beaten-down companies represent enticing long-term opportunities. Be warned, though: Interest rates are likely to continue to rise and geopolitical tensions will breed further uncertainty, so the next year or two might not be smooth sailing. 

Three Motley Fool contributors have identified Redfin (RDFN -4.34%), Unity Software (U -4.48%), and Shopify (SHOP -1.90%) as stocks to buy right now while they're trading at heavy discounts to their all-time highs; but a focus on the long run is key. 

A contrarian play

Anthony Di Pizio (Redfin): An economic environment that features rising interest rates usually isn't the best time to buy real estate-oriented stocks. Rising rates often lead to softer house prices because buyers can't afford to borrow as much money for their mortgage. But Redfin stock is so beaten down right now -- to the tune of 90% from its all-time high -- that it's starting to look incredibly attractive. 

The company is focused on its long-term strategy of representing an increasing share of homes sold across the U.S. Its primary business is brokering, with its army of 2,750 agents across the country delivering a level of scale that smaller, independent real estate firms can't match. It's how Redfin is able to charge listing fees of between 1% and 1.5% compared to the industry norm of 2.5%, saving its customers over $1 billion to date. 

In the recent first quarter of 2022, Redfin represented the sale of 1.18% of all homes sold in America (by value). Since Redfin's 2,750 agents comprise only 0.09% of the total 3 million registered agents in the U.S., it's performing with extreme efficiency. 

But the potential for home prices to fall poses risks to Redfin in a couple of ways. It may result in fewer houses coming to market for sale, and it could result in the company's iBuying segment taking losses. iBuying is a process that involves Redfin purchasing homes directly from willing sellers with the intention of flipping them for a profit, which works great in a rising market, but the company has $245 million in inventory right now that could fall into the red if interest rates place too much pressure on prices. 

With that said, the company is growing rapidly over the long term. It has increased revenue by a compound annual growth rate of 50% between 2017 and 2021, and analysts expect further growth in 2022 with revenue potentially topping $2.5 billion. Investors with a short-term mindset might want to steer clear of Redfin because of the challenges ahead, but for those focused on the next five or 10 years, this stock could wind up being a home run. 

A top turnaround stock

Jamie Louko (Unity Software): Investing in Unity Software in 2022 has been painful, to say the least. Shares of the leading game development platform are down more than 82% from their all-time high, with a substantial portion of this drop coming from a disappointing first-quarter earnings announcement. 

Unity runs a game development platform that allows developers to do everything from building a game to monetizing it. Its game development features are primarily subscription-based models, while its "operate" solutions -- which allow developers to grow and monetize their games -- are primarily served through consumption-based models.

In the most recent quarter, management noticed issues with its monetization service. The company's artificial intelligence that drives developer monetization was inaccurate due to bad data ingestion. As a result, Unity will have to start from scratch and gather new data, which the company anticipates will be a $110 million hit to the top line for the rest of the year.

Investors weren't pleased with that, which sent the stock spiraling. However, this low price could be appealing to long-term investors. Management made it clear that it does not expect this to be a long-term issue and that the ramifications of this error shouldn't impact 2023 results. 

At 11 times sales, Unity trades near its lowest valuation since coming public in 2020. If Unity can get this monetization service up and running again, then shares could be a steal right now. Of course, this isn't a guarantee. The company would likely have to spend lots of money and time convincing customers it is accurate and ready to use, but with 61% market share in 2021, the company has developed a strong brand reputation that could help it recover.

It could be a rough ride for investors for the rest of the year, but these prices look attractive for long-term investors who want to invest in the top dog in a gaming market worth $336 billion.

Empowering direct-to-consumer businesses

Trevor Jennewine (Shopify): This year, 64% of consumers will buy directly from brands on a regular basis, up from 49% in 2019, according to eMarketer. That reflects the growing importance of direct-to-consumer (D2C) business models. Compared to marketplaces like Amazon, D2C models afford sellers more control over the buyer experience, giving them the opportunity to build lasting customer relationships. And Shopify is leading the charge.

Shopify offers commerce software and financial services that enable businesses to operate across physical and digital channels, including branded websites, mobile apps, and online marketplaces. That value proposition has attracted over 2 million merchants to the platform, and Shopify ranks as the leading e-commerce software vendor in terms of market presence and user satisfaction, according to a recent G2 Grid report.

Despite tough comps and high inflation, Shopify still delivered respectable financial results over the past year. Revenue climbed 40% to $4.8 billion, and the company generated positive cash from operations of $315 million. As a caveat, cash from operations fell 51% compared to the prior year, primarily due to rising operating expenses associated with scaling the business.

However, management's growth strategy should give investors confidence. Shopify recently acquired Deliverr for $2.1 billion, accelerating its plans to build a nationwide fulfillment network. Deliverr's predictive software, warehouse network, and carrier partners will supplement Shopify's warehouse automation technology (e.g., collaborative mobile robots) to streamline fulfillment. Ultimately, the Shopify Fulfillment Network will empower merchants to offer two-day or next-day delivery across the United States. That should further differentiate Shopify from its rivals, and it should help Shopify merchants.

Currently, Shopify stock is 81% off its high, and shares trade at 8.3 times sales, an absolute bargain compared to their five-year average of 30.4 times sales. That's why now is an excellent time to buy this beaten-down growth stock.