The challenge isn't finding stocks that are beaten down. The challenge is finding ones that are worth buying. In some cases, stocks are down because their prospects for market-beating growth over the next several years has significantly deteriorated. But in other cases, stocks will perform well for their shareholders as their businesses keep delivering profitable growth.

If you have $2,000 to invest right now and are looking for timely stocks to buy, consider the two companies discussed here.

1. (WIX -1.19%) certainly fits the "beaten-down" description: As of this writing, it's down 80% from its all-time high. The stock is down in large part due to its slumping profitability. In 2020, the company's revenue was up 30% year over year, whereas its free cash flow (FCF) was only up 1%. In 2021, revenue was up 29%, but FCF plummeted 78%. And through the first half of 2022, it's had negative FCF of $49.5 million with single-digit revenue growth.

Slow revenue growth and slumping FCF aren't going to cut the mustard for Wix. However, management's goals for 2025 are much more impressive. It's hoping for $2.5 billion in revenue. For perspective, it generated $1.27 billion in 2021. And it's expecting $500 million in FCF -- a huge jump from its negative cash flow in 2022.

Wix's growth plan is ambitious but realistic, in my opinion. There's a reason its profitability is down. It has been partnering with companies like Vistaprint and LegalZoom to offer its web-building services to their users. But it's been expensive to grow its platform for partners. In 2021, it spent 108% of revenue from partners on operating expenses just for that part of the business. And this year, it expects to spend 96% to 99% of partner revenue on operating expenses.

While partnering with other companies is costly now, it's a key component of Wix's future growth. Partner revenue was up 75% year over year in 2021 and will help reaccelerate overall revenue growth once it's making up a greater percentage of the mix.

Beyond 2022, expenses for Wix's partner revenue are scheduled to mitigate, allowing it to gain operating leverage and unlock FCF once again. Most of the market doesn't recognize this potential. Therefore, it could be a good time to pick up shares of now, before its multi-year initiatives start to pay off.

2. Zoom Video Communications

Zoom Video Communications (ZM 2.06%) grew full-year revenue 326% and 55% in its fiscal 2021 and fiscal 2022 respectively, which roughly corresponds to calendar 2020 and 2021. With growth rates like these, it was reasonable to assume it would take a breather. And it has -- revenue in the first half of fiscal 2023 is up just 10% year over year. But there are reasons to believe the slowdown is only temporary rather than an early sign of an impending collapse.

For starters, Zoom's remaining performance obligations (RPO) of $3.2 billion are at an all-time high. Granted, the growth rate in RPO is slowing like revenue. However, this contracted revenue still represents substantial strength for the company.

Metric Q2 FY 2022 Q3 FY 2022 Q4 FY 2022 Q1 FY 2023 Q2 FY 2023
Revenue YoY growth rate 54% 35% 21% 12% 8%
RPO YoY growth rate 66% 51% 51% 44% 37%

Data source: Zoom quarterly presentations. Chart by author. FY = fiscal year. YoY = year over year.

Businesses spending more over time are driving ongoing growth for Zoom. This is largely thanks to the surging adoption of newer products like Zoom Phone. In August, the company had licensed over four million seats for its Phone product. Last August, it had just gone over two million -- this product has roughly doubled year over year.

Zoom Rooms and Zoom Contact Center are two other products that can continue to grow Zoom's revenue in future years. However, it's fair to point out that business isn't coming as easy for Zoom as it did in the past. For proof, consider that in the first half of fiscal 2023, Zoom's sales and marketing expenses increased almost 48% year over year, far exceeding its revenue growth rate. 

Building infrastructure for new products and the increased sales efforts means that Zoom may not be as profitable as it once was. However, it is still profitable and sits on an enviable balance sheet of $5.5 billion in cash, cash equivalents, and marketable securities and no long-term debt. In short, Zoom is financially strong and getting stronger.

Zoom stock surpassed $500 per share in 2020. I'm not saying that it will bounce back to that price this year or even in the next couple of years. I'm saying that Zoom's business is still growing, it's financially strong, and shares have fallen enough to lead me to believe it can produce market-beating returns from today. This is why I believe investors should take advantage of this beaten-down stock opportunity right now.

The hidden risk for both companies: the economy

Wix and Zoom are both relying heavily on businesses for growth. However, it's fair to question the health of the economy and that of individual companies. FedEx CEO Raj Subramaniam made waves on Sept. 15 by predicting a "worldwide recession." And I don't think Subramaniam is alone in this dire outlook.

Depending on how bad conditions get for the global economy and how long these headwinds blow, Wix and Zoom may grow their respective enterprise businesses much slower than they hope. It's certainly something to be aware of.

However, in my experience, there's always reason for pessimism. If I waited for entirely calm seas, I'd never sail. For this reason, I think investors should be buying stocks now. But don't make this $2,000 investment your only buy. Invest regularly over time, recognizing that fears could prove true. Stocks could fall further and provide better entry points.

I'm not calling the bottom for shares of Zoom and Wix. Rather, I'm optimistically investing for the future.