The stock market has not been kind to investors this year. The S&P 500 had its worst first half since 1970, and the Nasdaq Composite is currently 28% off its high. But the market has recovered from worse in the past, and there is no reason to believe this situation is any different. Eventually, the next bull market will erase those losses.

In the meantime, many beaten-down stocks are brimming with potential, and that creates a buying opportunity for patient investors. For instance, Roku (ROKU 0.27%) and MercadoLibre (MELI 1.10%) could both grow sixfold over the next decade, meaning shareholders could see a 500% return by 2032.

Here's why.

Roku: The top streaming platform in North America

Streaming pioneer Roku struggled in the second quarter as the macroeconomic environment continued to deteriorate. High inflation blunted consumer spending, especially on smart TVs and other discretionary electronics, and many brands cut their ad budgets to compensate for that softness. However, those headwinds are temporary, and the long-term investment thesis is still intact.

Roku is the top streaming platform in the U.S., Canada, and Mexico in terms of engagement, and engagement is a critical metric for marketers. As a result, Roku captured nearly 45% of programmatic connected TV (CTV) ad spending in North America in June 2022, while second-place Samsung and third-place Amazon held just 17% and 12% market share, respectively.

Roku is working to strengthen that sizable lead with The Roku Channel, an ad-supported streaming service that features free movies, TV shows, and live linear channels dedicated to news and sports. Roku began adding original content to the mix last year, and the reception has been quite positive so far. In the second quarter, The Roku Channel once again ranked among the top five channels on the platform in the U.S.

Despite its disappointing performance of late, Roku has still delivered solid financial results over the last three years.


Q2 2019

Q2 2022


Revenue (TTM)

$905.9 million

$3 billion


Cash from operations (TTM)

$39.4 million

$73.4 million


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

Looking ahead, The Roku Channel could be the source of a powerful network effect. As the most popular streaming platform in North America and Mexico, Roku should naturally capture an outsized portion of CTV ad spend in those geographies. That, in turn, should enhance its ability to license and create high-quality content for The Roku Channel, which should result in greater viewer engagement, bringing more ad dollars to its platform.

Building on that, CTV ad spend is poised for dramatic growth, both because viewers are moving away from traditional TV and because CTV ads can be targeted more effectively. In fact, CTV ad spend in the U.S. alone could reach $100 billion by 2030, up from $21 billion in 2021, according to BMO Capital Markets.

With that in mind, if Roku can deliver revenue growth of 20% per year over the next decade, its market cap could increase sixfold by 2032 (assuming a reasonable price-to-sale ratio of 2.9). That's why investors should consider buying this growth stock today.

MercadoLibre: The e-commerce leader in Latin America

MercadoLibre is the largest e-commerce marketplace in Latin America, and it ranks as the market leader in each of the major countries in which it operates. It has reinforced that edge with value-added services like logistics, financing, digital advertising, and digital payments. That makes MercadoLibre a one-stop shop for merchants.

Its logistics business (Mercado Envíos) and its fintech business (Mercado Pago) have been particularly instrumental in its success. Mercado Envíos handled 91% of shipping volume in the most recent quarter, and nearly 80% of that volume was delivered within 48 hours. That makes for a great consumer experience, and merchants wouldn't be able to achieve that on their own.

Additionally, Mercado Pago supports digital payments both on and off the MercadoLibre marketplace, a particularly important role given that many Latin Americans lack access to a bank account and debit card. In the most recent quarter, digital wallet users rose 42% to 21.4 million, and total payment volume skyrocketed 72% to $30.2 billion.

Not surprisingly, MercadoLibre has delivered impressive financial results over the past three years.


Q2 2019

Q2 2022


Revenue (TTM)

$1.8 billion

$8.8 billion


Cash from operations (TTM)

$289.7 million

$1.6 billion


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

Investors have good reason to believe MercadoLibre can maintain that momentum. The vast majority of its revenue comes from Argentina, Brazil, and Mexico, and all three countries rank among the 10 fastest-growing e-commerce markets in the world. More broadly, Latin America itself has one of the fastest-growing internet penetration rates in the world, and that should drive adoption of online shopping and digital payments in the years ahead.

According to Statista, e-commerce sales across all countries in which MercadoLibre operates will grow at 18% per year to reach $260 billion by 2025, and digital payments volume will grow at 15% per year to reach $510 billion by 2027. That leaves plenty of room for growth.

On that note, if MercadoLibre can grow revenue at 25% per year over the next decade, its market cap could easily increase sixfold (assuming a reasonable price-to-sales ratio of 3.1) in that time. That's why this growth stock is a smart buy for long-term investors.