These 2 Stocks Have Plenty of Room to Run

After a tumultuous year in the stock market, it looks like we're finally starting to see some sunshine. The S&P 500 market index fell by nearly 20% in 2022. Many high-flying growth stocks were brought down to earth with a bang last year as Wall Street swore off high-risk investments in a shaky economy.

Of course, not every stock is benefiting equally from the rebound. Investors are understandably nervous about historically high inflation, and the rising federal interest rates that were meant to tackle the inflation problem have been painful in their own right. Some investors would say that the medicine was worse than the disease.

However, the inflation-fighting efforts are starting to pay off and the average investor seems more willing to take on some risk in return for fast-growing business operations. Many of the fallen former favorites are coming back to life again. The S&P 500 is up by 7% year to date, and more volatile market measurements have soared even higher.

So let's dig into two stocks that are already coming back strong -- but still have plenty of room to run. Their stock price gains and business growth should continue for years to come.

SquareSpace's healthy growth in a struggling market

If you spend any time on the web these days, I'm sure you've heard of SquareSpace (SQSP -0.86%). The company helps people and businesses build good-looking and effective websites, complete with features such as e-commerce stores, artist portfolios, and interactive blogs with premium content for paying subscribers.

SquareSpace isn't shy about spreading the word about its user-friendly site-building tools, either. The company spent big bucks on a Super Bowl ad this year, showcasing Star Wars headliner Adam Driver. And you'll find a mix of SquareSpace ads and brand-sponsored videos across online media platforms like Facebook, Instagram, YouTube, TikTok, and Twitter. That's preaching to the choir in a pretty direct way, as the company promotes the tools for creating an online presence with the help of successful content producers.

The marketing tactics are working, too. SquareSpace's full-year revenues rose by 11% last year, despite a tough market where many of the company's closest competitors had to settle for single-digit percentage growth. Further, order bookings clocked in 15% higher, suggesting higher sales growth in the coming quarters as these subscription commitments are converted into revenue-bearing sales.

The sales are soaring in spite of the challenging economy, and cash profits are consistently positive. That's a rare combination, as successful growth stocks often consume more cash than they generate.

A large chunk of SquareSpace's future growth prospects comes from international expansion, as U.S. sales accounted for a towering 72% of total revenues in the fourth quarter of 2022. The site-building platform offers multilingual language templates and the company is always adding more local-language features.

Thanks to the fading economic stress and a fantastic fourth-quarter report, SquareSpace stock has gained 46% so far in 2023. But it's still a small fish in a big lake, collecting just 16% of the website-building sales in America last year.

With an increasing international presence, user-friendly site creation tools, and an effective marketing strategy, the company is well-positioned to capture an even larger share of the booming website-building market. As a result, investors seeking a high-potential growth stock should consider adding SquareSpace to their portfolios as it has ample room to run in both domestic and international markets.

Don't hit pause: now's the time to buy Roku stock

I've said it before and I will say it again. Roku (ROKU 0.95%) is ridiculously undervalued these days. Investors who know what's up should be buying this stock hand over fist as long as the senseless stock price discount lasts.

The media-streaming technology developer has seen share prices rise 57% year-to-date but that's just a small down payment on the much larger gains that lie ahead.

As the global streaming TV market continues to expand, and cord-cutting becomes increasingly popular, Roku is perfectly positioned to capitalize on these trends. Their strategic international growth plan, combined with their strong foothold in North America, sets the stage for even greater success down the line.

Despite its recent gains, Roku's stock is still down 89% from its 2021 all-time highs. It may have been overvalued at that point but the price correction that followed seems to have swung the pendulum much too far in the other direction. Hence, Roku's stock is an undeniable buying opportunity in the spring of 2023.

In fact, I'm so confident in Roku's prospects that I've been figuratively pounding the table on this stock, while literally returning to scoop up additional shares more than once in recent months. I can't help taking advantage of this undervalued opportunity to strengthen my own portfolio.

So, dear investors, don't let this opportunity pass you by. Roku's long-term potential is undeniable, and adding this undervalued stock to your portfolio could lead to impressive gains in the years to come. It's time to seize the moment and capitalize on the tremendous upside Roku has to offer.