First, there was the initial steep pandemic market downturn. That was followed shortly by a period in which every growth stock seemed to benefit from a big rebound related to loose monetary policy and excess cash floating around. That was followed by a market backlash related to rising interest rates and recessionary fears which hurt this category of equities over the last year.
Some of those companies were clearly unable to reasonably justify their high stock valuations during the big rebound and the stocks tumbled. But other companies continued to grow regardless of the volatile machinations of the market. Their stocks just may not reflect that growth just yet.
If you have the risk appetite and the capital to keep investing in the current environment, here are two growth stock names to consider that look like intriguing buys in June that you can reasonably hold for the long haul.
1. Fiverr International
Fiverr International (FVRR 3.74%) provides a platform designed to meet the talent-sourcing needs of the digital age, and it's doing so at an incredible scale -- even during a period in which businesses of all sizes are looking to cut back on costs. While it's not difficult to see the appeal that freelancing provides to both gig workers and companies looking to hire contract talent in a variety of economic environments, there is also a particular benefit to these types of professional relationships in difficult economic times.
For gig workers, whether freelancing is a full-time or part-time venture, the ability to earn money online in a flexible setting can provide some additional peace of mind when recessionary headwinds blow. And even as companies work to scale back costs and many introduce workforce restructuring initiatives, the ability to hire a freelancer to complete projects piecemeal for a set fee without needing to bring them on full-time is equally appealing.
Businesses large and small alike may be pinching pennies, but active buyers of freelance services still spent 4% more on gigs on Fiverr in the first quarter of 2023 than they did in Q1 2022. Fiverr had 4.3 million active buyers on its platform as of the end of the quarter, up just a hair from its active buyer count in the year-ago period. Still, revenue rose 1.5% year over year to $88 million, and the company's adjusted EBITDA nearly tripled to $11 million.
Fiverr also launched new categories to meet the changing needs of both buyers and sellers on its platform. In the first-quarter earnings report, management said that buyer searches for artificial intelligence-related gigs were up 1,000% from just six months prior. Although Fiverr just introduced artificial intelligence (AI) gigs in January of this year, freelancers have rushed in droves to offer AI services for buyers to purchase. In fact, the number of AI gigs available had already risen more than tenfold at the time of the company's first-quarter earnings report. Fiverr's growth in the current environment coupled with its proven ability to rapidly evolve to meet the changing needs of contractors and the businesses retaining them is an excellent sign that it can stay competitive for the long run. Still, shares are down by double digits from one year ago. Investors ought to put this stock on their watch list or consider buying on the dip.
2. Intuitive Surgical
Intuitive Surgical (ISRG 0.59%) is a medical device maker that specializes in surgical robotics for minimally invasive surgeries. In the more than two decades since its flagship product, the da Vinci Surgical System, first gained regulatory approval in the U.S., its use has been expanded to a wide range of surgical procedures. These include cardiovascular, thoracic, kidney, and gynecological procedures, to name just several.
Intuitive Surgical has several models of its main system on the market. It also won approval for another system, the Ion, a few years back from the U.S. Food and Drug Administration (FDA). The Ion is specifically for use in minimally invasive lung biopsies. In March, the Ion also received the CE Mark, the E.U. equivalent of FDA approval. Intuitive Surgical is getting ready to introduce the product to the U.K. market shortly -- the first of what are likely to be numerous launches in the European region.
Intuitive Surgical doesn't just generate revenue from sales of its surgical systems, although a single sale can bring in millions. In fact, Intuitive Surgical makes even more from recurring streams of revenue. These recurring streams include customer support services, replacement tools and instruments for its surgical systems, and training courses for physicians and other healthcare professionals on how to use these systems.
Its first-quarter revenue totaled $1.7 billion, a 14% jump from the year-ago period. Only about $427 million of that total came from sales of its surgical systems. Intuitive Surgical also reported net income of $355 million. On an adjusted basis, that figure came in at $437 million. Currently, the company has roughly 7,800 of its da Vinci Surgical Systems installed for customers around the globe. As the use cases for surgical robotics expand across minimally invasive and traditional forms of surgery, Intuitive Surgical will benefit from these tailwinds, as it controls about 80% of this market. Now could be an opportune time for investors to take a second look at this top healthcare stock.
