2 Beaten-Down Growth Stocks to Buy With $1,000 for 2024

Finding the right stocks for your portfolio and having the willingness to hold on to great businesses through the ups and downs of the market isn't easy. But if the alternative is trying to time the market's whims, which few investors have a chance of doing correctly and consistently, the pros of being a long-term investor far outweigh the cons.

If you invest in companies for the long haul with a minimum buy-and-hold horizon of five years or more, you will experience rough patches in the market. Historically speaking, bear markets tend to appear every three to four years. These periods can last anywhere from months to a year or more. The stock market has not once seen a single bear market from which it has not recovered, and eventually outpaced its prior performance.

With that in mind, if you have $1,000 to invest in stocks right now (money that you don't require for bills or other financial obligations) and the appropriate buy-and-hold horizon, here are two fantastic, discounted stocks you may want to add to your buy list in 2024.

1. Teladoc Health

Teladoc Health (TDOC -2.40%) shares have popped about 27% over the last month, but the stock is still down by 55% from its 52-week high. Right now, Teladoc boasts more than 90 million members as its whole-person approach to telehealth continues to draw large enterprises and individual consumers to its platform in droves. That figure is about 75% higher than its member count three years ago at this time.

Anyone who follows or owns this stock (I have been a shareholder for a few years now and bought after the company's pandemic peak) is well-acquainted with Teladoc's challenges over the last few years. Decelerations in revenue from the height of the pandemic, a series of impairment charges to write down the overinflated valuation of its Livongo acquisition a few years ago, and deep unprofitability are just a few reasons the stock has fallen out of favor with some investors.

However, the steady growth of its membership base is just one of multiple green flags for this business looking toward 2024 and the years beyond. The telehealth industry represents a roughly $100 billion opportunity today and is expected to explode to a total valuation of about $455 billion by the start of the next decade.

Teladoc remains one of the premier telehealth providers globally, with large insurance companies, corporations, and patients around the world using its platform consistently. In fact, it counts about half of the Fortune 500 as its client base. The company makes most of its money through recurring revenue in the form of access fees, mostly paid by insurance companies and other large entities that pay subscriptions to Teladoc so their members can access its wide range of healthcare services. The company also makes money from fees for one-time visits.

Teladoc generated $660 million in revenue in the most recent quarter, up 8% from one year ago, $582 million of which was derived from access fees. Broken down by segment, $374 million of the company's revenue came from its integrated care division, while $286 million was attributable to its BetterHelp division. Integrated care refers to a variety of services like general medical care, chronic condition management, and specialty medical services. BetterHelp is its virtual therapy segment that is mostly leveraged by individual healthcare consumers.

Although Teladoc still isn't profitable on a generally accepted accounting principles (GAAP) basis, that net loss is shrinking. In the most recent quarter, the company reported a net loss of $57 million, compared to $73 million in the same quarter in 2022. Moreover, the company brought in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $89 million in the three-month period.

Any Teladoc investor is going to have to exert a level of patience as the company continues to right itself financially. Still, the continued growth trajectory of this company and the explosive industry in which it operates may make that wait well worth it.

2. Pinterest

Pinterest (PINS 4.04%) was another considerable pandemic favorite but has seen its shares fluctuate heavily in the wake of a difficult economic environment and decelerating growth. Pinterest is trading up by about 60% from the start of 2023, a market-beating return for investors who have stayed with the stock through that period, but is still down single-digits from its 52-week high.

As always, it's important to look beyond share price to see whether there is an underlying value proposition for the business that could make it a worthwhile long-term investment. In the case of Pinterest, I would contend that there is.

First of all, it's important to understand how Pinterest makes money. The company looks like a visually appealing platform full of images about a variety of subjects from travel inspiration to home decor, but this is something of a clever distraction from the fact that Pinterest is an advertising machine.

The company sells advertising real estate to businesses of all sizes across a variety of industries, and many of those images and videos you see on the free platform are actually paid advertisements. While many companies have curtailed ad spending in the last couple of years given the macro environment, this isn't a durable trend. Both brick-and-mortar as well as online businesses rely on ad strategies exactly like Pinterest's platform to drive sales.

Pinterest recently introduced a new advertising initiative called Direct Links, which means that when a company pays to advertise on the platform, the ad takes users straight to their website. Since that launch, which just occurred in the third quarter of 2023, the company has already seen an 88% increase in outbound click-through rates, which indicates how often a Pinterest user views an ad and clicks to access that outbound link.

This past April, Pinterest announced it would be linking up with Amazon for its first third-party ad partnership. The initiative allows Amazon ads for certain sponsored products to display on the Pinterest app and website, which could unlock a new stream of revenue for the business in the years ahead. Pinterest's management has noted that the business will not likely start to witness the fruits of this partnership until 2024. Still early tests already showed a 50% improvement in search relevance, which is key not only to conversion, but also in achieving a lower cost per click for the advertiser.

Revenue was up 11% in the most recent quarter to $763 million, and the company was profitable with net income of $6.7 million. Pinterest also saw its monthly active user count hit 482 million, an 8% increase from a year ago. There's much more to this business than the turbulent waters it's encountered over the last few years, and for risk-tolerant investors, that could be an opportunity to scoop up some shares.