Please ensure Javascript is enabled for purposes of website accessibility
Search
Accessibility Menu

15 Growth Stocks That Are Still Long-Term Winners

By Jeremy Bowman - Jun 17, 2022 at 7:00AM
Person stressed watching stock market crash.

15 Growth Stocks That Are Still Long-Term Winners

It's hard out there

There's no question it's a difficult time for growth stock investors. The S&P 500 officially entered a bear market earlier this week, and the Nasdaq is down about a third from its peak last November.

Cathie Wood's ARK Innovation ETF (NYSE: ARKK), a good proxy for high-growth stocks, is down a whopping 75% since early 2021, showing how far many early pandemic winners have fallen.

Market sentiment will eventually shift, though it may take a recession before that happens. For investors with a long time horizon, now looks like a great time to take advantage of discounts in strong companies. Let's take a look at 15 of them in this list.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

A Roku Stick and remote.

1. Roku

Plenty of stocks have taken brutal hits this year, and Roku (NASDAQ: ROKU) has been hit about as hard as any.

The leading streaming-device maker is down 83% from its peak last summer.

While it's true that growth in the streaming market has slowed as we lap the pandemic boom, advertising revenue is still growing robustly at Roku, up 39% in the first quarter, and the company's competitive position is just as strong, if not stronger, than it was before the pandemic started.

However, the stock is actually lower than it was at the start of 2020. That seems like a clear mistake and one that will be rectified once market conditions start to normalize.

ALSO READ: Best Streaming Service Stocks of 2022

Previous

Next

Person looking at Pinterest images on tablet.

2. Pinterest

Visual discovery engine Pinterest (NYSE: PINS) was another early winner in the pandemic whose gains have rapidly faded.

The social media stock is now down 79% from its peak early last year as growth has slowed in digital advertising and the boon it got from the stay-at-home nature of the pandemic has faded.

However, there's some good news for Pinterest investors. After declining through 2021, monthly active users have begun to grow again, increasing from 431 million to 433 million in the first quarter, and the company has demonstrated that its business model can be highly profitable.

In 2021, it posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $814 million, or a 32% margin. At its current price, it trades at just 15 times that EBITDA figure.

Previous

Next

Shopify e-commerce platform on a smartphone, laptop, and tablet.

3. Shopify

Few stocks as big as Shopify (NYSE: SHOP) have been hit as hard. The e-commerce software leader is down 81% from its peak late last year as e-commerce growth has ground to a halt, and investors seem to fear the launch of Amazon's Buy With Prime program, which offers Prime shipping to independently hosted e-commerce sites.

However, e-commerce sales will bounce back, and it's a good bet that the first quarter was the nadir for growth as comparisons were particularly difficult. It was the last quarter before vaccines were available to the general public, and online shopping spiked after the March stimulus.

Shopify has said that results will improve in the second half of the year, and the stock should rebound as they do.

Like Roku, it's trading for less than it was when the pandemic started, even though sales have tripled.

Previous

Next

A software developer works at a laptop with pencil in hand.

4. Okta

Software stocks have also gotten crushed in the market crash, and Okta (NASDAQ: OKTA) is one of the clearest examples.

The cloud identity specialist is down 71% from its peak last fall even as its performance has held steady throughout the pandemic.

The sell-off has to do more with market sentiment changing as investors have decided that software-as-a-service (SaaS) and tech valuations broadly were too high.

However, organic revenue continues to grow by about 40% at Okta, and the company is on track to reach $800 million in free cash flow by 2025.

With those kinds of numbers, a market cap of $13 billion and a price-to-sales ratio of 9 look like a good entry point.

ALSO READ: Why Buying Okta Now Could Be a Brilliant Move

Previous

Next

Digital data on a screen.

5. The Trade Desk

Like social media and other digital advertising stocks, ad tech stocks have also gotten clobbered in the sell-off.

The Trade Desk (NASDAQ: TTD), the largest open demand-side platform (DSP) in the industry, is down 57% since its peak, and many of its peers have fallen even further.

While it's true that growth in the industry may have moderated from the heady pandemic days, it's still solid now. The ad tech sector is also one of the few growth sectors in which most companies are also highly profitable.

For example, revenue at The Trade Desk increased 43% in the first quarter to $315 million, and the company posted adjusted net income of $105 million, or a margin of 33%.

It's hard to complain about numbers like that.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

Person at a tabletop with a mobile phone and laptop and boxes for shipping.

6. MercadoLibre

Among the e-commerce stocks that have fallen sharply this year is MercadoLibre (NASDAQ: MELI), the Latin American specialist in online retail and digital payments.

MercadoLibre shares are down 66% from their peak early in 2021, but what's notable about the company is that it suffered the same fate as U.S. e-commerce stocks that have seen their growth shrivel up.

Currency-neutral revenue was up 67% to $2.2 billion in the first quarter, and the company posted positive net income according to generally accepted accounting principles (GAAP) that showed the business is scaling up effectively.

In a healthier environment, the stock should be rewarded.

Previous

Next

PayPal HQ building.

7. PayPal

The tech crash hasn't been kind to fintech stocks, either, as a boom in digital payments seems to be fading along with other pandemic tailwinds.

However, it's hard to doubt that payments will continue to move toward digital channels in the future, and PayPal Holdings (NASDAQ: PYPL), a leader in the space, will be a major beneficiary.

PayPal is down 75% from its peak last summer, and the stock now trades at a modest price-to-earnings ratio of 20 based on this year's expected earnings per share.

ALSO READ: Investing in Fintech Stocks

Previous

Next

A house with a Redfin For Sale sign on the lawn and a black Sold sign attached at the top.

8. Redfin

Real estate disruptor Redfin (NASDAQ: RDFN) is clearly struggling at the moment. The housing market is rapidly decelerating, and the company just announced it would lay off 8% of its staff.

However, the long-term business case for Redfin still looks solid. Home sellers often pay 6% in commissions to sell their homes, and they would love to avoid those fees. Redfin gives them an opportunity to do just that, charging 1% on its end, giving typical sellers a 4% commission fee.

The company has also moved into rentals by acquiring RentPath, and it has a growing home-flipping business, though that could be challenged in the current market.

There's still a lot of room for disruption in real estate. With the stock down 92%, it would be a mistake to count Redfin out.

Previous

Next

Two pairs of Farfetch sneakers.

9. Farfetch

Like other stocks on this list, Farfetch (NASDAQ: FTCH) was an early pandemic winner as the luxury online fashion company was one of the few apparel retailers to do well in the early stages of the health crisis.

However, since then the stock has come crashing down like other e-commerce stocks, and it's now down 89% from its peak in early 2021.

The company faced headwinds, including a sluggish business in China, its exit from Russia, and questions about its ability to turn a profit. However, analysts expect revenue growth to reaccelerate next year.

The luxury market will eventually bounce back, and Farfetch is well positioned to grab growth in the e-commerce sector.

Previous

Next

Global communications and city.

10. Twilio

You could make a long list of SaaS stocks to choose from, but another worthy contender from the cloud software sector is Twilio (NASDAQ: TWLO), the digital communications specialist that powers messages from companies like Uber Technologies.

Twilio stock is down 81% from its peak last February, even though the company continues to put up steady growth figures. Organic revenue increased 35% in the first quarter, and overall revenue was up 48% to $875.4 million. It also posted a dollar-based net expansion rate of 127%, meaning existing customers increased their spending by 27%.

Twilio now trades at a price-to-sales ratio of just 5.5, making it a good candidate for a comeback when market sentiment shifts.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

A Chewy dog brand rep and owner standing in a doorway.

11. Chewy

Chewy (NYSE: CHWY) was another pandemic winner that benefited from two separate pandemic trends.

First, e-commerce sales boomed during the global health crisis, and spending on pets did as well, with many Americans adopting a new furry friend for some company during the stay-at-home period.

Chewy shares are down 69% from their peak late last year, and while business has slowed down, the underlying growth story still seems promising.

Revenue increased 14% to $2.43 billion in a quarter with tough comparisons, and the company was profitable on a GAAP basis.

ALSO READ: The Worst Is Over for Chewy

Previous

Next

An American Eagle store.

12. American Eagle Outfitters

American Eagle Outfitters (NYSE: AEO) might not seem like your typical growth stock, but the company has a secret weapon. In addition to its namesake brand, the company also owns Aerie, the intimates brand for teens and young women that has taken loads of market share from Victoria's Secret, the former industry leader.

Aerie sales have doubled over the past three years, yet American Eagle is off 68% from its peak nearly a year ago. Like most of the apparel retail industry, the company had a challenging first quarter, but those concerns are more than adequately priced into the stock.

Shares trade at a forward P/E of just 9, and the stock offers a 6.2% dividend yield.

Previous

Next

A living room setup.

13. RH

Another retailer to make the list is RH (NYSE: RH), the high-end home furnishings company formerly known as Restoration Hardware. Though CEO Gary Friedman has been sounding the alarm on a consumer slowdown for several months now, there are reasons to bet on this stock for the long term.

RH did benefit from the boom in home furnishings spending during the pandemic, and it now seems to be suffering a bit of a hangover with the stock down 66%. As a high-end brand, RH is also particularly at risk of a recession.

However, the business cycle should eventually shift in its favor, and that could make today's low price look like a distant memory. The stock trades at a forward P/E of just 9, a bargain price for a stock that's historically delivered strong growth.

Previous

Next

Mechanic holding wrenches and looking under hood of car.

14. CarParts.com

Sticking with the theme, CarParts.com (NASDAQ: PRTS) is another e-commerce stock that was a big winner during the pandemic benefit thanks to an increase in online spending and an increase in spending on auto parts.

Though sales have slowed, the company still outperformed most of its e-commerce peers in the first quarter, with 15% revenue growth. Over the long term, CarParts.com is targeting 20% to 25% revenue growth and 8% to 10% adjusted EBITDA margins. If it can hit those numbers, it should recoup the 66% it's lost since early 2021.

ALSO READ: Why CarParts.com Is on the Right Track

Previous

Next

Several rings from an Etsy seller.

15. Etsy

Finally, another e-commerce stock that has been hit hard by the sell-off is Etsy (NASDAQ: ETSY), which is down 74% from its peak late last year.

The artisan-based online marketplace put up stellar growth during the pandemic with revenue tripling in some quarters, but that ground to a halt in the first quarter this year with gross merchandise sales actually declining.

However, short-term headwinds are to blame for the weak numbers as difficult comparisons and a shift in consumer spending on services like travel rather than goods are mostly to blame for the weak results.

Etsy has little competition in its niche, and its marketplace model is a proven profit generator. Performance should steadily improve over the course of the year, rewarding patient investors.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

A person's hands poised over a crystal ball.

Anything can happen

With the Federal Reserve's recent announcement to raise interest rates by 75 basis points, the fastest hike since 1994, investors should be prepared to expect more volatility, and it seems likely that there will be another leg down in the bear market.

Still, market and economic conditions can change fast, and it's possible that stocks will be on the rebound by the end of the year, depending on how quickly inflation cools off.

While timing the market is impossible, it's a good idea to own some of the stocks on this list when the next bull market starts to get going.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in ARK Innovation ETF, Amazon, CarParts.com, Inc., Etsy, MercadoLibre, Okta, PayPal Holdings, Pinterest, RH, Redfin, Roku, Shopify, The Trade Desk, and Twilio. The Motley Fool has positions in and recommends Amazon, Chewy, Inc., Etsy, Farfetch Limited, MercadoLibre, Okta, PayPal Holdings, Pinterest, RH, Redfin, Roku, Shopify, The Trade Desk, and Twilio. The Motley Fool recommends American Eagle Outfitters and Uber Technologies and recommends the following options: long January 2023 $1,140 calls on Shopify, short August 2022 $13 calls on Redfin, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

Previous

Next

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.