This year has been a tough one so far for growth stocks. The Nasdaq Composite Index has slid 28.5% year to date as the post-pandemic demand for technology and digitalization normalizes. Also, the Federal Reserve's determination to bring stubbornly high inflation down to the 2% level has led to a surge in interest rates, making it tougher for businesses to borrow. The subsequent fall in consumer demand and the sharp decline in valuations have knocked many glossy stocks off their pedestal.
But amid the wreckage, there are still gems to be found. Companies that are leaders in their industry can manage the tough conditions to post a turnaround in due course. And let's not forget that there are still companies that are posting healthy growth despite the fall in their share prices. The market may be punishing a wide swath of growth stocks, but the savvy investor who is on the lookout for quality businesses can scoop up stocks on the cheap.
Here are three stocks that may have hit new all-time lows but could be poised for a strong rebound very soon.
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1. Beyond Meat
Shares of Beyond Meat (BYND -0.17%) have lost three-quarters of their value year to date and are trading close to their all-time low of $11.50. The plant-based meat producer posted a dismal set of earnings for its fiscal 2022's third quarter, with revenue falling 22.5% year over year to $82.5 million. The company also incurred a gross loss of $14.8 million during the quarter as inflation raised its cost of goods sold while selling prices fell year over year.
Beyond Meat, however, may be at an important inflection point. CEO Ethan Brown has implemented measures to drive sustainable growth by cutting roughly one-fifth of its workforce and says the company is "advancing on key strategic partnerships." He also targets for the company to be cash-flow positive by the second quarter of 2023. Recent developments look promising -- Beyond Meat has debuted its plant-based Beyond Steak at more than 5,000 Kroger and Walmart stores nationwide and is introducing new plant-based chicken nuggets and popcorn chicken choices. It may take a while before the company gains traction with its new products, and investors may need to be patient as the business works through its problems.
2. DoorDash
DoorDash (DASH -2.01%) has seen its share price plunge by 74% in the past year, but the food delivery company's numbers continue to shine. For Q3, total orders rose 27% year over year to 439 million, while revenue jumped 33% year over year to $1.7 billion. Marketplace gross order value also continued its climb, rising by 30% year over year to $13.5 billion. DoorDash's cash generation ability has also improved by leaps and bounds. The first nine months of 2022 saw the delivery company generate $358 million of free cash flow, more than triple the $94 million generated in the same period last year.
The company is now doing more for its merchants with the introduction of a merchant benefits program that gives merchants access to discounted products and services on its platform. It also recently partnered with Sephora, a retailer of beauty products, to enable the delivery of items from over 500 stores in the U.S. and Canada. As DoorDash's business gains momentum, investors can also hope to see its stock recover.
3. Peloton
Peloton (PTON -2.24%) was a darling of the pandemic that has since fallen from grace. Its stock price has fallen by 78.3% in the past year but has bounced off its all-time low of $7 back in September. The reversal of fortunes was tied to a sharp fall in connected fitness products for its fiscal 2022 ended June 30, resulting in the company reporting an operating loss of more than $2.7 billion.
Things are, however, slowly looking up for the fitness products retailer. It still booked $199 million worth of restructuring and impairment expenses for its fiscal 2023's first quarter but is forecasted to be at free-cash-flow breakeven by the second half of the current fiscal year. October also saw Peloton cutting around 500 positions from its team and expanding relationships with its third-party partners to lower the cost of delivery. What's more, the number of members rose 6% year over year for Q1 to 6.7 million. Peloton's subscription revenue continued to climb, shooting up 36% year over year to $412.3 million.
It may still take a few more quarters for these changes to show results, but the business is on a better footing now and has weaned itself off its previous high-cost base. Investors' patience may well be rewarded as the brand still has its loyal customers, and e-commerce giant Amazon (AMZN -1.64%) announced that Peloton was one of its top sellers during its Early Access sale. Thousands of Peloton bikes will also be installed in Hilton's hotels by the end of this year, further bolstering the case for a turnaround next year.
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