Last year, investors learned the hard way that growth stock investing can be unpredictable. The Nasdaq Composite index, which contains heaps of growth stocks, collapsed by 33% in 2022.
There are no guarantees on Wall Street, but there is a lot of history to analyze. One recurring theme for bear markets like the one we've experienced is that they've always been temporary.
Image source: Getty Images.
Every bear market in history has eventually been wiped away by a subsequent recovery. Armed with this knowledge, right now looks like an excellent opportunity to buy terrific businesses at discount prices.
Potential investors should know they don't need to commit an entire month's salary to get the stock market to start working for them. Now that online brokerages have mostly done away with minimum deposit requirements and commission fees, a sum as small as $200 is more than enough to get started with several shares of some terrific growth stocks.
If you have an extra $200 to invest that you won't need to pay bills or cover emergencies, buying some shares of these two stocks looks like a smart move right now.
NYSE: DOCS
Key Data Points
Doximity
If you aren't a medical professional in the U.S., there's a good chance you haven't heard of Doximity (DOCS +0.27%) or its social media platform. With 80% of the nation's physicians already on its membership roster, though, pharmaceutical companies that want to get their messages in front of the right people know it well.
In Doximity's fiscal third quarter, which ended December 31, 2022, total revenue rose 21% year over year to $133.6 million. This is relatively slow compared to the company's recent past, but it's downright amazing right now for a social media platform that relies heavily on digital advertising. Over the same period, Facebook's parent company, Meta Platforms, reported fourth-quarter sales that declined 4% year over year, while Alphabet reported fourth-quarter Google advertising sales that declined 3.6% year over year.
Doximity's great at leveraging the popularity of its platform to launch productivity tools for U.S. physicians. For example, Doximity Dialer is an easy way for doctors to contact patients in a professional setting while using their personal devices. A record 375,000 unique active clinicians used the company's telehealth tools in the fiscal third quarter.
Doximity is quickly embedding itself in physicians' day-to-day workflow, but the market hasn't seemed to notice. The stock currently trades at 37.4 times trailing free cash flow. This multiple implies significant growth in the years ahead -- but not nearly as much growth as the company appears capable of.
NASDAQ: INMD
Key Data Points
InMode
The next growth stock that looks like a smart buy now for everyday investors is a niche medical device maker called InMode (INMD +6.15%). This Israel-headquartered company markets a wide variety of devices used to perform noninvasive cosmetic procedures.
One of InMode's biggest growth drivers at the moment is a minimally invasive alternative to liposuction called BodyTite. With a narrow probe inserted under the skin surface, providers can melt fat tissue to shape and contour the skin above. As the only device with patent-protected radio-frequency technology, BodyTite could remain the leading liposuction alternative for the foreseeable future.
InMode recently reported record fourth-quarter revenue that rose 21% year over year to $133.6 million. As impressive as this sounds, it's likely just a fraction of the company's addressable market. According to Grand View Research, the global market for noninvasive aesthetic procedures reached $61.2 billion in 2022.
Shares of InMode have been trading at the relatively low multiple of just 17.3 times trailing earnings. With a strong competitive position in the rapidly growing market for noninvasive cosmetic procedures, this business looks like an irresistible bargain right now.
