The stock market, as measured by the S&P 500 index, was recently down more than 25% from its 52-week high. If the overall market is down sharply, it means that lots of companies have seen their stock prices fall.

It doesn't mean, though, that all of those stocks that have fallen deserve those lower valuations. A stock that has fallen 25% or even 85% over the past year may be priced a lot lower, but it's not necessarily worth a lot less. Roku, for example, which specializes in video streaming technology, has seen its shares crater 85% from their 52-week high. It might have been overvalued before, but it seems undervalued now.

Here are a few other promising companies with shares down sharply that you might want to consider. Each has the potential to grow robustly as this bear market eventually turns into a bull market.

1. PayPal

Shares of fintech giant PayPal (PYPL 1.15%) were recently down 69% from their 52-week high. You're very likely familiar with PayPal, which specializes in digital payments. Its PayPal platform is well known, but the company is also home to Venmo, Zettle, Xoom, Hyperwallet, Honey, and Paidy (among other businesses). PayPal recently boasted 429 million consumer and merchant accounts in more than 200 markets. Together, those accounts made some 5.5 billion transactions in the company's second quarter, generating $340 billion in total payment volume.

PayPal has grown impressively, recently sporting a market value near $100 billion, and that's after its 69% drop. The company is facing some headwinds at the moment -- such as inflation and higher interest rates that can depress consumers' enthusiasm for purchasing -- but these won't necessarily be long-term problems. Meanwhile, PayPal has multiple ways to grow, such as internationally or via new offerings like its new PayPal Rewards app that offers buyers cash back while promoting merchant deals.

2. Etsy

Etsy (ETSY 0.92%) has seen its shares tumble hard -- they were recently down 68% from their 52-week high. The company is an e-commerce business boasting a "House of Brands" that includes its flagship Etsy site focused on handmade and vintage items, along with the popular used clothing marketplace Depop, the musical instrument marketplace Reverb, and the Brazil-based Elo7 marketplace of handmade goods.

The company got a huge tailwind from the pandemic, as millions of consumers did more shopping online, but in-person shopping has been recovering. Still, there's much to like about Etsy -- such as its capital-light business model that doesn't need to stockpile inventory in warehouses, unlike many other retailers. It recently boasted more than 90 million active buyers and racked up $13.5 billion in gross merchandise sales in 2021. In its second quarter, revenue grew 10%, with management noting, "This growth is attributable to the Etsy marketplace transaction fee increase, the addition of Depop and Elo7 to our House of Brands portfolio, and the strength of our Etsy Ads product, which continues to be a great solution for sellers looking to grow their businesses."

3. Invesco QQQ Trust

The Invesco QQQ Trust (QQQ -0.77%) isn't exactly a stock; it's an exchange-traded fund (ETF) invested in the 100 biggest non-financial companies in the Nasdaq. So it's perfect for anyone who would like to buy (and hold for the long term, ideally) companies such as Apple, Microsoft, Amazon.com, Tesla, and Google parent Alphabet.

Many of its components are compelling buys on their own, and buying shares of the ETF quickly gets you a bit of each. It's like buying scores of big companies' stocks -- on sale! The ETF's shares were recently down 34% from their 52-week high.

These are just three of many promising and undervalued growth stocks out there. Take a closer look at any that interest you.