In anticipation of an imminent bull market, two Motley Fool contributors highlight investment opportunities in growth stocks that have experienced significant declines from their previous highs.
SoFi Technologies (NASDAQ: SOFI): Down 61% from High Jennifer Saibil discusses the evolution of SoFi Technologies, emphasizing its growth, improved profitability, and strategic acquisitions. SoFi’s focus on digital financial services, catering to students and young professionals, has garnered success. The acquisition of Golden Pacific Bancorp expanded its services, and the company has demonstrated impressive growth metrics. Despite a recent slowdown in revenue growth, the addition of new members and products remains robust. The adjusted EBITDA increased by 121%, showcasing improving profitability. With a favorable price-to-sales ratio and the potential for net profits, SoFi is positioned as a growth stock poised to thrive in the anticipated bull market.
Airbnb (NASDAQ: ABNB): Down 32% from High Keith Noonan provides insights into Airbnb’s resilience and strong business performance despite stock volatility. Airbnb’s third-quarter results show a notable 18% year-over-year revenue growth, reaching $3.4 billion, while adjusted net income surged by 33%. The company’s impressive net income margin of 47% and robust free cash flow of $4.2 billion over the trailing 12 months highlight its financial strength. With a market capitalization of approximately $95 billion and a valuation at less than 23 times its trailing free cash flow, Airbnb appears attractively valued. The company’s strategic moves, such as growing active listings by 19% year over year, position it well for long-term expansion. With the stock still trading 32% below its peak valuation in February 2021, Airbnb stands out as an appealing option for growth-focused investors seeking a reasonable price.
Both SoFi Technologies and Airbnb present compelling cases for investors seeking opportunities in the upcoming bull market, leveraging their unique strengths and growth potential.
