Take advantage of the discount prices this depressed stock market is offering right now.
Whether you’ve been investing for decades or are just starting out, this has been a difficult year. The benchmark S&P 500 index lost more ground in the first half of 2022 than it had since 1970.
The thing to remember about market downturns is that bad stocks tend to fall just as easily as great stocks that can deliver market-beating gains. These three growth stocks have what they need to outperform over the long run, but they’ve fallen between 51% and 80% from the peak prices they reached last year.
1. Shopify
Shares of Shopify (SHOP -6.26%) benefited greatly from the surge in demand for online shopping when the pandemic kept us all at home. The former high-flyer has fallen more than 80% from the peak it reached last year.
The bottom fell out from under Shopify shares largely because investors are nervous about the company’s ongoing transition from a mainly software company to one that also excels at fulfillment services like its e-commerce rival, Amazon. To this end, Shopify acquired Deliverr for $2.1 billion in July.
Deliverr is a fulfillment technology provider that enables two-day shipping for direct-to-consumer merchants. This will make it easier for more of Shopify’s merchant partners to offer ultra-fast fulfillment services without handing control of their customer relationships over to Amazon.
Heavy investment to shore up its fulfillment network combined with a general online shopping slowdown have led to losses on the bottom line for Shopify’s e-commerce businesses in the first half of 2022. Investors will be glad to know the company finished June with nearly $7 billion in cash. That’s more than enough to keep operations humming along while general e-commerce activity catches up to the company’s improved capacity.
2. Duolingo
Duolingo (DUOL -2.58%) stock surged during the strictest pandemic lockdowns, but it’s fallen by more than half since it peaked last September. This language-focused education company owns the top-grossing education app on Apple’s App Store and Google’s Play Store.
Learning a new language or brushing up on an old one was one of the top activities for people with extra time on their hands during strict COVID-19-related restrictions. Investors worried that fewer people with extra time on their hands would curtail Duolingo’s rapid growth rate and hammered the stock without waiting for evidence.
You wouldn’t know it by looking a the stock price, but Duolingo’s app is still bringing in new subscribers and retaining old ones. In August, the company reported second-quarter revenue that grew more than 50% from the previous year’s period.