Despite its recent and short-lived recovery, the market's drop of nearly 20% since the start of the year means that it's firmly in bear market territory. Bear markets are often harrowing times to be invested in growth stocks, and this one's no exception. Between rising interest rates, inflation, and global disruption from the coronavirus, the shares of most growth-oriented companies have been hammered.
However, there are a pair of quickly expanding businesses that are weathering the unpleasant economic conditions with grace. And they might even keep beating the market by continuing to do what they're already doing, so it might be worth picking up a few shares to hold for a few years. Here's why.
1. ShockWave Medical
With ShockWave Medical's (SWAV 0.04%) shares gaining 65.4% this year, it's safe to say that the bear market isn't causing it any problems. The company makes a medical device that heart surgeons use to dislodge calcium plaques from the insides of people's arteries using sound waves, thereby preventing a cardiac crisis. And because its device is less likely to cause complications than the existing methods for clearing arterial blockages caused by calcium, business is booming.
Its quarterly net income is up by 97.5% this year so far, reaching more than $25.5 million, and over the last year, its quarterly revenue expanded by 85.3% to hit above $120.7 million. Management estimates that the global total addressable market (TAM) for its hardware is more than $8.5 billion annually, which means the company could grow and grow at its current pace for quite some time before slowing down. To access that market, ShockWave has a global sales organization that's now operating in 61 countries. And as it keeps developing new catheters to use with its device, it'll have new opportunities to sell to its existing customers, not to mention fresh ones.
The latest and greatest catalyst for growth that'll ensure ShockWave continues to slay the bear market is a recent slew of approvals in China for its primary device as well as several catheters. Since regulators assented to it commercializing its product there in May, the rest of the year and beyond should see revenue start to ramp up -- and ramping sales in the U.S. won't hurt either.
2. Veru
Working on timely products is a great way to get the market excited about your stock, and Veru's (VERU -8.33%) stock is up by more than 150% since Jan. 1 for exactly that reason. It's developing a medicine called sabizabulin for the purpose of treating severe COVID-19, right when the world is (still) eager for more therapies. In fact, the biotech has already submitted its packet to the Food and Drug Administration (FDA) petitioning for an Emergency Use Authorization (EUA), meaning that it could have the drug commercialized before the end of the year. And if regulators give it the green light, it could eventually treat around 631,000 patients per year in the U.S., or approximately slightly more than half of the number of people hospitalized with severe coronavirus infections.
That's a big part of the reason Veru's stock is outperforming, but it isn't the only part. It already has a pair of reproductive health products on the market that have yielded a trailing 12-month (TTM) revenue of $52.4 million. Though its top line contracted by 46% in Q3 due to falling revenue of its FC2 female prophylactic, that will likely change soon. As of Aug. 11, it started to commercialize its therapy called Entadfi for benign prostate enlargement, and sales should soon start to roll in.
Furthermore, Veru is also working on plenty of late-stage programs in its pipeline. In particular, sabizabulin is being investigated to treat several types of metastatic breast cancers and prostate cancers. Over the next few years, those programs could get commercialized too, yielding even more growth. But, to keep beating the bear market in the meantime, it probably just needs to secure sabizabulin for severe coronavirus treatments.
