Don't let the bear market scare you away from buying stocks. Now could be the optimal time to load up on some heavily discounted growth stocks as opportunities that exist today may not be around for long. A recovery is inevitable, and trying to time the market or waiting for that perfect opportunity could lead to your missing out altogether.
A couple of stocks that may be too good to pass up right now include CRISPR Therapeutics (CRSP +4.60%) and Shopify (SHOP 1.37%).
1. CRISPR Therapeutics
The gene-editing therapy industry is still in its infancy stages, but it presents an exciting long-term growth opportunity for investors. The CRISPR gene-editing market was barely worth $1 billion in 2021. But by 2030, analysts from Straits Research project it will be worth nearly $15 billion, growing at a compound annual growth rate of 29.8% until then.
NASDAQ: CRSP
Key Data Points
CRISPR is a company that's in an excellent position to capitalize on those opportunities. It's already working with Vertex Pharmaceuticals on a functional cure, exa-cel, for beta-thalassemia and sickle cell disease -- a couple of rare blood disorders. Exa-cel is far enough along that the companies are in the process of submitting a biologics license application for the treatment, which should be complete in the first quarter of this year.
The healthcare stock fell a mammoth 46% last year as investors ditched risky growth stocks. At a market capitalization of $3.7 billion, CRISPR could potentially make for an attractive acquisition target for a larger healthcare company looking to expand into gene editing.
CRISPR is also sitting on around $1.9 billion in cash and marketable securities, which makes the stock a relatively safe buy (the company's operating cash burn has been averaging $117 million per quarter) and gives a potential acquirer an additional incentive to buy the stock: money.
If exa-cel obtains approval from the Food and Drug Administration, CRISPR could quickly become a scorching-hot buy. Although there's some risk here, the company's strong cash balance adds some safety to the stock and could make investing in it a calculated risk worth taking.
2. Shopify
Shopify is one of those stocks that I would say took an excessive beating last year. It declined 75%, which is far worse than the S&P 500's fall of 19%, worse than Amazon's 50% crash, and even worse than the growth-oriented ARK Innovation ETF, which collapsed 67% in 2022.
The big reason Shopify stock is doing poorly is simple; its sales growth is a fraction of what it was in the previous year:
SHOP Revenue (Quarterly YoY Growth) data by YCharts.
Keeping up that three-digit growth rate would have been difficult for any business, and a slowdown was inevitable at some point. The problem with Shopify is that like many tech businesses, it expanded quickly and now has had to scale back and focus on cutting costs.
But Shopify's e-commerce business has come a long way over the years. For the period ended Sept. 30, 2022, Shopify generated nearly $1.4 billion in quarterly revenue. While the growth rate was just 22%, that's almost as much revenue as Shopify generated in all of 2019 when its top line totaled $1.6 billion. And yet, Shopify is now trading at around the levels its stock was at back then.
NASDAQ: SHOP
Key Data Points
This is a period of transition for big tech companies to bring down their spending and adjust their headcount to more sustainable levels. There could be more pain ahead for Shopify with a recession potentially looming this year.
But a lot of that pessimism may already be priced into the stock, and that's why buying it now may be an excellent move for investors who are willing to buy and hold, and wait for the bear market to end. When it does, Shopify could be among the stocks that benefit the most from a more favorable outlook on the economy and growth stocks in general.
