When we think of growth stocks, we generally think of the share prices soaring near 52-week highs, and not the ones which have plunged to 52-week lows. However, patient investors should take a second look at these fallen stocks to see if they can still bounce back in the future, since distressed stocks can often yield the best long-term returns provided that the long-term story remains intact .

.

Let's take a look at three such stocks -- 3D Systems (NYSE:DDD), Amazon.com (NASDAQ:AMZN), and Pandora Media (NYSE:P).

3D Systems
3D Systems, one of the most well-known names in 3D printing, plunged from an all-time high of $96 at the start of 2014 to around $37. .

Over the past seven years, 3D Systems acquired a portfolio of companies (around 50) to inorganically grow into a 3D printing giant. The problem with that approach is that it was costly, unpredictable, and often consists of too many moving parts.

Last quarter, 3D Systems' revenue rose 25% year-over-year to $151.5 million, but missed the consensus estimate of $162.3 million. On a non-GAAP basis, it earned $0.16, which also missed estimates by two cents. To make matters worse, its organic growth rate, which doesn't account for acquisitions, only came in at 10% -- down from 28% in the previous quarter and 30% in the prior year quarter.

On Oct. 22, 3D Systems warned that capacity constraints would result in a failure to meet market demand for 3D printers and parts during the third quarter. Earlier this year, inventory problems already caused it to delay shipments of its consumer-facing Cube 3D printer. As a result of these production issues, the company revised its third quarter and full year guidance:

 

3Q 2014 Non-GAAP EPS

3Q 2014 Revenue

FY 2014 Non-GAAP EPS

FY 2014 Revenue

Company

$0.16-$0.19

$164 million-$169 million

$0.70-$0.80

$650 million-$690 million

Analysts

$0.21

$186 million

$0.74

$677 million

Source: Company press releases, Thomson Reuters consensus estimates.

3D Systems remains on track to meet estimates for the full year, but product delays, production constraints, and lackluster organic growth have convinced investors to flee the stock. When 3D Systems reports earnings on Nov. 10, contrarian investors should check if 3D Systems' organic growth rate came in above 10% during the quarter. If it did, and management mentions improvements in control over inventory and shipments, the stock's year-long decline might finally be over. 

Amazon.com
Amazon is well known for its double-digit revenue growth and its flimsy bottom line, but most investors hadn't expected the jaw-dropping loss of $0.95 per share it posted in the third quarter. That was a sharp drop from the loss of $0.09 per share it posted a year earlier, and far worse than the loss of $0.74 per share analysts had expected. Revenue climbed 20% year-over-year to $20.58 billion, but also fell short of the consensus estimate of $20.9 billion.

Amazon also offered weak guidance for the current holiday quarter, expecting revenue to come in between $27.3 billion to $30.3 billion, and for its adjusted profit to come in between a loss of $570 million to a profit of $430 million. Wall Street had expected sales of $30.9 billion on a profit of $460.5 billion. In response to those bleak numbers, Amazon stock plunged as much as 10% on Oct. 24, resulting in a 26% year-to-date decline. But even after that drop, the stock still trades with a whopping forward P/E of 246.

In the past, Amazon focused on beating eBay and brick-and-mortar bookstores like Barnes & Noble. Today, it's declaring war on Netflix with streaming videos and set-top boxes, Google with home delivery and forked Android devices, and PayPal with Amazon Local Register. It even bought game streaming site Twitch for $970 million and test launched delivery drones. While it makes sense for Amazon to expand its Prime ecosystem with new products and services, it may also need to slow down and streamline these scattergun strategies.

However, long-term investors should remember that Amazon is still in the process of tethering more users to its ecosystem. In a few years, Amazon might dominate both product searches and media consumption across multiple devices with an iron fist, making its current top and bottom line woes seem fairly trivial. Moreover, Amazon's trailing P/S ratio is currently near a 5-year low, indicating that the stock is certainly getting oversold by that measure.     

Pandora Media
Internet radio giant Pandora Media, which hit an all-time high of $37 back in February, is now down over 27% since the beginning of the year.

Last quarter, Pandora's revenue rose 42% year-over-year on a GAAP-adjusted basis to $239.6 million. Mobile revenue climbed 52% to $188 million, while local advertising revenue soared 118% to $41.8 million. Its market share of the U.S. radio listening market also climbed to 9.06%, up from 7.77% in the prior year quarter. Content acquisition costs paid to record companies gobbled up 46% of Pandora's revenue -- slightly down from 46% a year earlier -- but those costs still caused a net loss of $2 million for the quarter.

The big difference between Pandora and its rival Spotify is that Pandora generates 81% of its revenue from ads, while paid member subscriptions account for around 85% of Spotify's top line. The weakness in Pandora's model is that it depends on a large base of free users to listen to songs for a longer time to accumulate ad revenue. But at the same time, longer listener hours on its ad-free premium service, Pandora One, equals higher royalty payments to record companies minus the ad revenue. That's why it's worrisome that active listeners only grew 5.2% year-over-year to 76.5 million last quarter, while listener hours climbed 25% to 4.99 billion.

Pandora engages in a delicate balancing act to keep ads churning along strongly enough to offset royalties. Unfortunately, the company now faces several heavyweight competitors -- including Apple's (NASDAQ:AAPL) iTunes, Google's Play Music, and Amazon Prime Music -- which could disrupt that balance. Nonetheless, investors should also remember that Pandora stock is the cheapest it's been since the beginning of the year, in terms of P/E and P/S ratios, and that its dominant market share is still growing.

 

Leo Sun owns shares of Apple. The Motley Fool recommends 3D Systems, Amazon.com, Apple, and Pandora Media. The Motley Fool owns shares of 3D Systems, Amazon.com, Apple, and Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.