Famous value investor Benjamin Graham once said, "In the short run, the market is a voting machine, but in the long run it is a weighing machine."

His words are a reminder that stocks can fall for all kinds of reasons, but stocks ultimately follow the performance of the business. Holding shares of growing companies is the simplest path to building wealth.

Many growth stocks are trading well off their highs in 2023. Lower consumer spending is putting downward pressure on valuations of certain companies. But that's to the advantage of the long-term investor. Let's look at two beaten-down stocks that could earn stellar returns off these lower share prices.

1. Roblox

Roblox (RBLX -0.45%) shares are down 70% since the end 2021. However, this popular gaming platform has a growing base of 65 million daily active users, and is seeing revenue accelerate after a slump last year. There are a few reasons the stock could have legs in 2024 and beyond.

Roblox has continued to expand its user base. Over the last three years, DAUs have nearly doubled from 33.4 million to 65.5 million. The recent launch on Sony's PlayStation 5 (PS5) console, which has more than 100 million active users, is a catalyst for more growth.

The company is also seeing improving revenue growth. Much of the content on the platform is free, so Roblox relies on players buying virtual currency (Robux), which is used to unlock premium content on the platform. Over the last year, revenue accelerated to 15% year over year, which is solid momentum as it launches on the PS5.

Management is investing in new ways to keep players satisfied with their experience, such as spatial voice chat and virtual calls between friends with the upcoming Connect feature. These efforts are paying off, as total hours of engagement increased by 24% year over year in Q2. 

So what areas still need improvement? These investments are clearly weighing on Roblox's bottom line, where it hasn't converted its growing revenue into profit. But management guided for the top line to grow faster than expenses next year, which should see this trend reverse and turn into a catalyst for the stock.

RBLX Net Income (Quarterly) Chart

Data by YCharts

Roblox is trying to make its platform a daily utility, and the recent key performance metrics indicate it is making progress. The recent dip could make the stock a timely buy for the long term.

2. FuboTV

FuboTV (FUBO 3.45%) has benefited from the cord-cutting trend, which has sent its subscriber base surging in recent years. Revenue growth has never been a problem for the live TV streaming platform, but losses on the bottom line have weighed on the stock's performance. The stock is still down about 83% since the end of 2021, but FuboTV's latest quarterly results show a business that is turning the corner financially. 

In the second quarter, the company's net loss was cut almost in half compared to the year-ago quarter. This makes a trend following similar results in the first quarter. 

FUBO Net Income (Quarterly) Chart

Data by YCharts

Growing demand for affordable TV, as opposed to the expensive bundling plans from cable TV providers, is playing to Fubo's advantage. FuboTV expects North American subscribers to exceed 1.5 million for 2023, up from 1.44 million at the end of 2022. There is stiff competition in the market, but Fubo's sports-focused platform is clearly winning fans.

The stock has been a double-edged sword investors. On one hand, the company is delivering the top-line growth investors want to see. Revenue was up 41% year over year in the second quarter as management better optimized pricing across its subscription plans. However, the company has performed poorly on the bottom line as the cost of acquiring subscribers wiped out the increases on the top line.

With the company demonstrating better cost discipline, FuboTV is on track to turn a profit. Management expects to achieve positive free cash flow by 2025. An improving advertising market, which generates a small amount of high-margin revenue, could be the final catalyst that launches the stock higher over the next few years.