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It’s been a wild ride for investors since the start of this decade. Wall Street’s major stock indexes have bounced back and forth between bear markets and bull markets several times over the past four years.
2023 was a truly bullish year; Nasdaq Composite (NASDAQINDEX: ^IXIC) To some extent, it has been left behind by its peers. on the other hand, Dow Jones Industrial Average and S&P500 Although the Nasdaq Composite hit a new high, the Nasdaq Composite ended February 15 approximately 1% below its all-time high in November 2021.
For some investors, the Nasdaq’s inability to put the bear market gloom of 2022 completely in the rearview mirror signals a lost two years for growth stocks. But for long-term investors with cash reserves, the Nasdaq’s notable decline presents an opportunity to buy shares in high-quality, fast-paced companies at bargain prices.
Here are four exciting growth stocks you’ll regret not buying following the Nasdaq bear market decline.
paypal holdings
The first great growth stock you’ll be kicking yourself for not picking up on the Nasdaq Composite Index, which is still struggling to put the 2022 bear market behind it, is none other than the fintech leader. paypal holdings (NASDAQ:PYPL). Despite increasing competition in the digital payments space, PayPal has the catalyst it needs to make its long-term shareholders significantly richer.
First, investors need to understand that there is room for multiple winners in the digital payments space. According to estimates by the Boston Consulting Group, fintech’s annual revenue could increase six times to his $1.5 trillion by the turn of the decade. PayPal is leading the way.
While it’s unfortunate that active account growth has been hampered (2023 active accounts down 2% year over year), the most important key performance indicators are trending in the right direction. Total payments passing through PayPal’s platform increased by 12% in constant currencies to reach $1.53 trillion in 2023.
More importantly, the average number of payment transactions completed by active accounts over the subsequent 12 months increased to 58.7 by the end of December. This represents a 43.5% increase in average payment activity among active accounts since the end of 2020. Even if active accounts are growing slower than expected, existing accounts are more engaged with the platform than ever before. Since PayPal is primarily a fee-driven business, this is the secret to increasing gross margins.
The company’s shareholder-friendly moves cannot be overlooked. PayPal aims to repurchase $5 billion worth of common stock in 2023 and reduce annual operating expenses by at least $1.3 billion (as of 2023) to improve profit margins.
PayPal is also historically cheap, with its stock trading at less than 11 times consensus 2025 earnings.
green thumb industries
The second shocking growth stock you’ll regret not buying following Nasdaq’s 2022 bear market downturn is U.S.-focused Cannabis Multi-State Operator (MSO) green thumb industries (OTC: GTBIF). Marijuana stocks have been in the news for the past three years, but Green Thumb has set the standard of excellence among his MSOs.
Although cannabis reform legislation failed to gain traction on Capitol Hill, medical and adult-use legalization efforts in states led to steady growth in the cannabis industry. According to market intelligence firm BDSA, the U.S. cannabis industry should enjoy a compound annual growth rate of 11% through 2027. That means legal cannabis sales in the U.S. could reach $43 billion by 2027, and Green Thumb is in pole position to take a bite of that. increases at a significant rate.
In December, Green Thumb opened its 90th dispensary, and the company now spans 15 legal states in the United States. The problem is that the company has dozens of additional licenses to open pharmacies in major markets in the future. Green Thumb’s annual sales went from $22 million to over $1 billion in just five years.
But what makes this company special is not necessarily its market breadth, but its product mix. In the quarter ending September, 44% of net sales came from dried cannabis flower, with the remaining 56% coming from derivatives including e-cigarettes, edibles, beverages, concentrates, pre-rolls, health and beauty products and more. It was something. Derivative pot products enjoy higher price points and significantly higher profit margins than cannabis flower. This is why Green Thumb remains profitable while virtually every other MSO is losing money.
Green Thumb Industries’ needle continues to point higher. Wall Street currently expects earnings per share to increase 10x from 2022 to 2026. Profits could grow even faster if Congress eventually legalizes adult-use cannabis.
JD.com
As the Nasdaq Composite Index remains below all-time highs, the third surprising growth stock you’ll regret not adding to your portfolio is China’s No. 2 e-commerce company. JD.com (NASDAQ:JD). Even though China’s economic data has been disappointing in recent months, there is every reason to believe that JD.com is ideally positioned for the long term.
Jingdong and its peers should benefit from China’s economic reopening after three years of harsh coronavirus lockdowns. Regulators ended the zero-corona mitigation strategy in December 2022, but it will take time to iron out long-standing kinks in the country’s supply chains. With a booming middle class and a history of outpacing the United States in growth sectors, e-commerce should have a long road to massive expansion in China.
What makes JD special is the company’s operating model.nevertheless alibaba Although JD occupies the highest position in terms of market share in China’s e-commerce field, JD’s operating model is much more flexible. Alibaba derives most of its revenue from third parties that use online marketplaces.
Jingdong, on the other hand, operates as a true direct-to-consumer retailer. In other words, they handle the inventory and logistics needed to get the product to the consumer. This gives the company more control over its operating margins.
Current and prospective investors should also be excited about the company’s plans to separate its real estate and industrial divisions and list them on the Hong Kong Stock Exchange. Spinoffs make complex businesses easier to understand and usually unlock value for shareholders.
Finally, JD.com is cheaper than ever as a publicly traded company. Despite a long track record of double-digit growth, the stock could be bought for more than seven times Wall Street’s consensus earnings in 2024.
quickly
The fourth inspiring growth stock you’ll regret not buying after the Nasdaq bear market decline is an edge computing company. quickly (NYSE:FSLY). Although Fastly’s stock price tumbled last week after the company slightly missed Wall Street’s consensus revenue estimates for the fourth quarter, the company’s foundations for success are solid.
Fastly is best known for its content delivery network, responsible for moving data from the edge of the cloud to end users as quickly and securely as possible. Since the start of this decade, Fastly has seen years, if not decades, of growth opportunities as companies move their data and their customers’ data online and in the cloud at an accelerating pace. We are looking forward to This is why the company’s global network capacity has increased by 58% to 313 terabytes per second since the end of March 2022.
Similar to PayPal, optimism about Fastly has a lot to do with the company’s key performance indicators trending in the right direction. In the fourth quarter, the average amount spent by business customers hit another all-time high at $880,000, and the number of business customers jumped to 578. That means businesses continue to gravitate towards Fastly’s services.
The company’s dollar-based net expansion rate (DBNER) is arguably an even more compelling source of optimism. In each of the past eight quarters, DBNER has been between 118% and 123%, including his 119% in the quarter ending December. What this tells investors is that Fastly customers who have been with the company for at least a year are spending 18% to 23% more on a year-over-year basis. This is great news for his Fastly, as it is a usage-focused platform.
Another positive for the company is the hiring of Todd Nightingale as CEO (he will take over in September 2022). Mr. Nightingale previously led the enterprise networking and cloud division. Cisco Systems. Not only does he have a keen understanding of what catalysts can drive his Fastly’s growth over the next 5-10 years, but he also has a keen understanding of where to apply the levers to reduce costs and push the company into the recurring profit pillar. I know what I can pull.
Fastly is a stock with a high likelihood of double-digit growth through at least the rest of the decade, and the potential for triple-digit returns.
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Sean Williams has positions at Fastly, JD.com, and PayPal. The Motley Fool has positions in and recommends Cisco Systems, Fastly, Green Thumb Industries, JD.com, and PayPal. The Motley Fool recommends his Alibaba Group and recommends the following options: His March 2024 $67.50 Short His Calls on PayPal. The Motley Fool has a disclosure policy.
4 Inspirational Growth Stocks You’ll Regret Not Buying Following Nasdaq Bear Market Drop was originally published by The Motley Fool
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