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The year 2022 has not been kind to growth stocks. A lot of 2021 heroes have fallen from their heady 2021 days. Are all of them undervalued right now? Have their true values been exposed after the high tide ran out?
10 Hot Growth Stocks To Buy Now
10 Hot Growth Stocks that have dropped 60% from their 52-week high
Let’s take a look at the 10 hottest growth stocks that dropped 60% from their 52-week high and how they have suffered.
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Etsy
Etsy is a New York-based e-commerce company that supplies handmade or vintage items and crafts. After battling several challenges such as significant inventory buildup, supply chain issues resulting from the pandemic, high inflation, and the Russia-Ukraine conflict the stock has lost about 66% this year. However, these near-term headwinds are not sufficient to undermine the long-term potential Etsy possesses. The company has highly differentiated itself in the competitive online retail space and has continuously reinvested in its platform to enhance the shopper’s engagement and experience. Moreover, it has also successfully converted many casual shoppers into habitual buyers on its platform.
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PayPal
PayPal is a California-based global financial technology company that operates an online payment system in multiple countries supporting online money transfers. Due to a reduction in the growth rate of its sales especially after the termination of its partnership with eBay the shares of the company have dropped around 70% from its 52-week highs. The company’s first-quarter financials for the year too received mixed responses but the continued growth in its active accounts and the increased rate of customer engagement are quite impressive. Moreover, features like the latest monthly BNPL option, crypto trading options, or deals with honey ensure these numbers will grow even more.
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Moderna
Moderna is a biotechnology company engaged in the discovery, development and commercialization of messenger RNA therapeutics and vaccines used for treating various kinds of diseases. The uncertainty in the market coupled with the competition from peers had an impact on Moderna as well such that the stock that had a 52-week high of $497 is now trading only at $128. The threat from the omicron variant of the coronavirus still exists to this day and recently Moderna had reported outstanding results from its trial of a booster candidate that showed “superior” neutralizing antibody response against omicron. This move has provided the company with a significant competitive advantage and thus it might surge once again.
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Zoom
Zoom is a US-based tech company that had become a household name during the pandemic. As everyone was locked up in their homes the zoom application served as one of the primary resources for their communication with the outside world. But later on, as people started getting back to their offices and schools the company’s growth rate suffered and the once pandemic darling lost almost 260% from its 52-week high of $406. However, Zoom still has potential. The increased customer counts every quarter can easily help the company sustain itself. Moreover, its venture into the conversational AI market can also substantially support its progress.
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Lucid
Lucid is a California-based electric vehicle manufacturing company that has one of the longest ranges of fastest charging electric cars in the market. However, battered by several constraints such as high inflation, shortage of chips, or supply chain disruptions, the Lucid stock is down by more than three times compared to its 52-weeks high of $58. The ongoing green vision and the shift toward a cleaner and carbon-neutral future across the world ensure the demand for EVs is going to increase. Lucid has partnered with many organizations in Saudi Arabia to ramp up its production levels and thus take the maximum benefit from these emerging opportunities.
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MercadoLibre
Based in Argentina, Mercado Libre is one of the largest e-commerce organizations that operate an online marketplace for e-commerce and online auctions and also offers several value-added services such as fulfilment and logistics, digital advertising, consumer lending and many more. The stock has fallen significantly from its all-time highs but its pace of growth in revenues even in this dull market as well as the potential of the online commerce space indicates the company can grow significantly in the longer term. Moreover, its rising margin levels also indicate the profits in the company are growing even faster than its revenues.
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Netflix
Netflix lost subscribers for the first time ever in its history. High inflation and the subsequent increase in the interest rates by the Fed to combat the same had pulled down the stock to a $180 level from a 52-week high of $701. However, some of the recent news from Netflix like “season 4 of Stranger Things” breaking the records of watch hours or it planning a reality show based on “Squid Game” which is one of the most profitable ventures suggests the coming quarters might be stronger. Further, the decision to tie up with Roku might help the company to overcome many of the impending challenges it has been facing.
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DocuSign
DocuSign is a California-based company that helps businesses manage their documents electronically. The company has benefitted a lot from the pandemic situation but as soon as the economy reopened and people started going back to their offices the DocuSign stock started facing a significant reduction in growth and ended up losing more than 80% of its value. Despite that, the stock is worth buying as it is a pioneer in the digital signature technology sector. Further, its collaborative features in digital documents and its use of artificial intelligence for analyzing a document and flagging potential risks on problematic clauses or opportunities can largely drive its future progress.
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Under Armour
Under Armour is a Washington-based sports equipment manufacturer that deals with footwear, and sports and casual apparel items. After facing several unexpected challenges and delivering disappointing quarterly results the company had become one of the biggest underperformers in the market. Precisely, Under Armour is now more than 66% down from its 52-week high and from June 21 onwards shall be moved to the S&P midcap 400. However, the stock is extremely cheap now and the transformations it has been making like reducing the number of products offered to streamline its portfolio might help the company in improving its margin levels in the coming times.
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Align Technology
Align Technology manufactures 3D digital scanners and Invisalign clear aligners that are used in orthodontics. The stock has fallen 66% from its 52-week highs followed by the increasing levels of competition in the market and the weak demand for its products over the past two quarters. Notably, the company’s revenues, EBITDA as well as earnings per share recently have been quite alluring and the stock is also trading at a cheaper valuation than many of its peers. Further, the headwinds it has been facing these days are manageable to quite some extent. Therefore, in the coming years, Align Technology might deliver strong returns however, those might not be as outstanding as it did a couple of years back.
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