While there's no denying the ongoing market volatility has disrupted investors' portfolios and mindsets, this bear market also presents many intriguing buying opportunities for those with a long-term outlook. If you have the cash on hand and are comfortable buying in such a market environment, excellent companies with strong businesses that can drive prolonged growth are still ripe for the taking.
The volatility so far in 2023 has generally been to the upside, perhaps signaling that stocks are turning a corner. But concerns about a fallback to an all-out bear market remain. In such uncertainty, opportunities arise. Here are two smart stocks to consider buying in the current market with the understanding that they are long-term investments that should do well, regardless if the next market is bear or bull.
1. Airbnb
Airbnb (ABNB -0.96%) is coming off of a remarkable year of growth. 2022 witnessed the ongoing travel industry recovery, as well as other sources of consumer spending that this online marketplace for short-term homestays and experiences continues to tap into. This recovery ended in numerous new financial metric highs, including revenue growth and profitability.
In 2022, the company hit $8.4 billion in revenue and $2 billion in net income. That revenue figure was up 40% from 2021 totals. It was also Airbnb's first full year of profitability in the history of the company. Its top- and bottom-line growth was even more impressive compared to pre-pandemic levels. Airbnb's revenue in 2022 jumped 75% from 2019, while its net income was compared to a net loss of $674 million three years ago.
Even as nights and experiences booked and gross booking value jumped 31% and 35%, respectively, in 2022, these metrics were up 20% and 67% on a three-year basis. In short, the growth that Airbnb is seeing isn't just because people are getting back on the road after a prolonged period of inability to leave home or traverse international borders.
This surge in growth is coming from a variety of factors, including the adoption of Airbnb's platform by both travelers and hosts, recovery in short-term travel, and a continued boost in long-term stays. As of the end of 2022, Airbnb recorded 6.6 million active listings on its platform, a 16% increase from the prior-year period, with management noting that the current economic uncertainty is making the possibility of earning secondary or replacement income through hosting all the more attractive.
And beyond durable travel patterns in both domestic and international markets, normal vacation stays are anything but the only factor spurring Airbnb's growth forward. The company is continuing to see remarkable growth in its long-term stay segment, which are bookings of at least 28 days or more. This segment accounts for 21% of all Airbnb's bookings in its most recent report. The reality is that more people can travel for longer periods while earning income than ever before with the rise of remote and hybrid work arrangements.
This is a cohort of travelers that Airbnb is hoping to tap into further in the years ahead, and it's already doing that, not only through upgrades to its platform but also via wide-ranging initiatives with governments around the world to make it easier for digital nomads to relocate and understand local laws and visa regulations. Airbnb's broadening global footprint both in and outside of the traditional travel industry, coupled with its platform that caters to everyone from leisure travelers to business travelers to digital nomads and everyone in between, certainly creates a compelling case for investors searching for a profitable company with an enviable trajectory of growth still ahead.
2. Pinterest
Pinterest (PINS -0.31%) remains a business with an intriguing growth story even as it fell short of its pandemic-era level of growth in recent quarters. Still, it wouldn't have been reasonable to expect that level of growth to continue unabated indefinitely. Also, while user growth is a key metric for investors to track the health of this business -- after all, this translates to more eyeballs for the platform to advertise to -- this isn't the only element that matters.
Notably, how Pinterest monetizes its users is equally if not more important than its user growth in a given quarter. And the company continues to prove that it is monetizing its users well, which of course means that it's also driving better returns for the merchants that advertise on its platform.
Looking at the fourth quarter of 2022, Pinterest's revenue totaled $877 million, up 4% year over year, while the company turned back to profitability in the three-month period with net income of $17 million. At the end of the quarter and the year, Pinterest recorded 450 million monthly active users, representing a 4% increase on a year-over-year basis.
Taking a step back, the company's 2022 revenue of $2.8 billion represented a 9% increase from 2021. Meanwhile, average revenue per user in the whole of 2022 rose 10% from 2021. And those two metrics -- revenue and average revenue per user -- represented respective increases of 145% and 67% from full-year 2019.
In short, Pinterest is growing steadily from pre-pandemic levels, is returning back to user growth, and is continuing to find effective ways of monetizing its users, all green flags for this business. Pinterest is jumping on the video content bandwagon as a means of increasing user retention and encouraging people to finish the journey to purchase, with its video content growing 30% sequentially in the final three months of 2022. Moreover, shopping ads revenue jumped 50% in the fourth quarter of 2022 compared to the fourth quarter of 2021.
Hopefully, its return to profitability -- another key metric for investors to watch -- signals the beginning of a longer-term trend. Pinterest's core business model remains particularly sticky for merchants looking to make headway with consumers in the digital age, with its image-focused platform that combines simple search results for user inspiration with compelling ads. As ad spending gets back to normal, the next five to 10 years could be a robust period of growth for Pinterest, and shareholders who stay along for the ride -- bear market or not -- should reap the rewards.
