With the Nasdaq Composite up 34% this year, investors are starting to look ahead to an improving economic outlook. Other signs of improvement include fading inflation and better growth prospects for leading companies. These factors are usually the ingredients that kick off a new bull market.

Meanwhile, valuations have fallen for some household names, such as social media leader Pinterest (PINS -2.02%) and the leading online home goods brand Wayfair (W 0.90%). The combination of solid business performance and stock price drops during the bear market can have that effect.

Buying stocks after a sharp sell-off can be very rewarding. As long as the companies in question are continuing to invest in the future and getting better at what they do, investors could find a bargain in their stock price that soars in value as the broader market rises over the long term and previously wary investors start to reconsider the potential of these growth stocks. 

Pinterest stock is already up 19% this year, while Wayfair has more than doubled off its lows. After a steep sell-off last year, these companies are showing progress in turning around, which is starting to be reflected in their stock performance. Here's why this is just the start of bigger gains to come for these two growth stocks as a new bull market approaches.

1. Pinterest

Pinterest is a unique social media platform that tends to attract people looking to spend money, naturally making it the ideal app for advertisers to invest in. It ended the first quarter with 463 million users, with Gen Z representing the fastest-growing demographic on the platform. As the advertising market rebounds from its recent slump, the purchase intent of the user base is an attractive revenue growth opportunity that could send the stock higher.

There are already signs of advertisers shifting investment over to Pinterest. For example, Mazda partnered with Pinterest to market the launch of its new CX-90 SUV. After reporting a sharp deceleration in revenue growth over the last year, Pinterest reported a slight acceleration in the first quarter, with the top line growing 5% year over year compared to 4% in the previous quarter.  

A near-term catalyst for further acceleration in revenue is Pinterest's new partnership with Amazon. This will enable users to shop ads with a seamless integration of Amazon's e-commerce business, which could accelerate revenue per user and improve Pinterest's long-term growth prospects.

This top social media stock is down 66% from its peak and is a timely buy right now. Analysts expect the company to post 7% revenue growth this year before accelerating to 14% next year. As the advertising market recovers, Pinterest should sustain above-average revenue growth and deliver market-beating returns for shareholders.  

2. Wayfair

Wayfair has emerged as the leading online destination for home goods -- a market approaching $200 billion in value in the U.S. alone. Wayfair delivered consistent robust growth leading up to the pandemic, but the recent weakness in home furnishings has sent the stock down to multiyear lows.

Despite revenue up 64% cumulatively over the last four years, the stock collapsed last year over falling revenue and widening net losses on the bottom line. Management was too aggressive to capitalize on the surging demand during the pandemic, and that mistake was costly. Over the last four quarters, Wayfair's net loss totaled a whopping $1.3 billion. 

The good news is the misstep can be corrected. Operating expenses are already heading back down as management executes a $1.4 billion cost-saving plan. This is the same leadership team that founded the company in 2002. The business operated with positive cash flow before 2020, so co-founders Niraj Shah and Steve Conine certainly understand the importance of running a profitable business. 

Wayfair is still a leading brand in this market that will attract more customers in a stronger consumer spending environment. It's gaining market share through the downcycle, which points to a bright future in the home goods market. 

The stock is down 80% from its peak and could recover a lot of that decline as revenue and free cash flow trends improve.