2 Top Growth Stocks Down 16% and 43% to Invest $1,000 in Right Now

The stock market continues to take investors for a ride, but a stream of hopeful inflation reports and strong market days may have rekindled interest for some who have been shying away from investing over the past year. The stock market is unpredictable, and no investment is guaranteed to win.

However, if you're a long-term investor faithfully putting your cash into quality companies you believe in, you can watch your investments steadily grow through the years. You can't time the best market days, but if you stay invested through the highs and lows, you can benefit from them. 

If you're on the hunt for top growth stocks to buy and have $1,000 to invest right now, here are two names to consider. 

1. Teladoc 

Teladoc Health (TDOC -2.40%) was a fan favorite with investors a few years ago, but that sentiment has waned significantly from the doldrums of the pandemic. The stock is trading down by about 30% from a year ago and 16% from the start of 2023. 

Teladoc has faced some distinct challenges in the last few years. The telemedicine company massively overpaid for diabetes specialist Livongo, and ended up taking on billions in impairment charges to write down the value of that acquisition. That plus steep operational costs led Teladoc down a road of blistering unprofitability for a series of quarters. 

Slowly but surely, however, that ship appears to be righting. Teladoc's net loss in the most recent quarter was $65 million, a marked improvement of 98% from the searing $3.1 billion net loss it reported in the same quarter last year. 

On another positive front, Teladoc brought in operating cash flow of $101 million and free cash flow of $65 million in the latest three-month period. Its revenue totaled $652 million, a healthy 10% bump from the prior year's quarter. On a four-year basis (so looking beyond above-average pandemic growth rates), that revenue figure is up by an incredible 402%. 

The global telehealth industry is rapidly evolving and adoption remains high, particularly as the incidence of chronic illnesses rise, doctors and hospitals further embrace technological innovation, and patients demand it. The telehealth industry is expected to generated more than $100 billion in revenue in 2023 alone. 

Teladoc is one of the world's leading platforms facilitating digital health interactions. It does so across a range of specialties, from general medicine to dermatology to mental health. This business isn't done, and its growth story is far from over. At a price-to-sales ratio of just over 1, investors can scoop up this stock at a serious discount right now.

Price alone should never make you buy or sell a stock, but a market leader in a lucrative industry with a compelling path to future growth ahead may warrant a second look at that valuation. 

2. Etsy 

Etsy (ETSY 0.34%) is another pandemic-era favorite that has dealt with turbulent investor sentiment, as evidenced by the stock's decline of about 43% from the beginning of this year. Etsy boasts a family of brands including Depop, the popular Gen Z marketplace for selling pre-owned clothes, and the Etsy.com marketplace. 

Etsy.com still brings in most of the revenue, profits, and cash that flow through Etsy's balance sheet. Etsy has been hard hit by negative investor sentiment for a few reasons. Growth has slowed notably from pandemic levels, although this would have seemed to have been a reasonable expectation at some point. 

Fears about consumer spending on discretionary goods persist too, which is to be expected given the ongoing potential of a recession. Still, the long-term picture still looks extremely favorable for the e-commerce industry, a space in which Etsy occupies its own unique niche with its focus on handmade, secondhand, and vintage goods. Etsy has also jumped in and out of profitability, but it has turned a profit the last three quarters in a row and counting.

Looking at the first half of 2023, Etsy reported profits of $136 million on revenue of $1.3 billion. That net income figure was down about 14% from one year ago, while revenue was up 9%. Etsy also generated gross merchandise sales of $6.1 billion in the six-month period, down by approximately 3% from the year-ago period. However, if you compared those net income, revenue, and GMS figures to the first half of 2019, Etsy achieved respective growth rates of 172%, 262%, and 189% on a four-year basis. 

It's also important to point out that Etsy has a habit of not only drawing new buyers in, but retaining them over a prolonged period. The company reported that it had over 96 million active buyers across its family of brands as of the end of the most recent quarter, up more than 123% on a four-year basis. To add context, 91 million of these were attributable to the Etsy marketplace. Etsy.com also finished the quarter with more than 36 million habitual buyers (individuals that spent $200 or more on at least six days of transactions over the last 12 months), which was up 218% from four years ago. 

Etsy may not be the golden child that it was with investors a few years ago. But there's still an active and growing addressable market for this business. And the growth story is still there. Investors could find this an opportune time to buy the stock on the dip, even as the market is still discounting shares heavily. Currently, the stock trades at a mere price-to-sales ratio of 3.