The market has not been kind to growth stocks lately. Several growth stocks have seen their values crash anywhere between 10% and 40%. Still, if you have a long-term time horizon, this could be a buying opportunity. To help investors make it through market volatility, remember that growth stocks generally increase faster than the overall market on the way up, and growth stocks decrease faster than the overall market on the way down. In other words, growth stocks are more volatile…
If you’ve got $2,000 that you will not need for at least the next several years, Pinterest (NYSE:PINS) and Chewy (NYSE:CHWY)are two beaten-down growth stocks you can buy right now. Pinterest is down 15.7% over the last month, and Chewy shares are down 10.8% over the same period.
Pinterest is a social media company that allows users, also called Pinners, to search through the multitude of images posted by other users and pin them to their own boards to view later. The free-to-join service has 478 million monthly active users, up 30% year over year, and continues to grow rapidly.
Pinterest, like its competitor Facebook, generates its revenue by selling advertising to marketers. While the more mature company Facebook generates an average revenue per user (ARPU) of $9.27, Pinterest is only in its early stages of monetization and subsequently has an ARPU of just $1.07. The substantial difference is an opportunity for Pinterest to close the gap as it increases its capabilities to monetize the user base.
While Pinterest is not profitable on the bottom line, surging revenue growth has led to an expanding gross profit margin. Keep in mind Facebook’s operating profit margins over the last two years were a remarkable 45.5% and 43.5%. If Pinterest can achieve even a fraction of Facebook’s success, its shareholders will be richly rewarded. And from the looks of it, Pinterest is making solid progress on that path.
Chewy, the online pet store, is sometimes called the Amazon (NASDAQ:AMZN) of pet stores because it sells exclusively online. Sales have been surging for the e-commerce retailer, and the pandemic only put fuel on the fire. People wanting to avoid potential exposure to the coronavirus visited stores less often and ordered online more. In fact, active customers at Chewy.com reached 19.2 million as of Jan. 31, an increase of 42.7% from last year. Certainly, some of those newly added shoppers will stick around even after the pandemic ends.
Folks are liking Chewy’s product availability and the features that it offers. Connect with a Vet, a virtual visit with a vet, is offered free to customers who are signed up for autoship, a service similar to subscribe and save on Amazon, where customers can save money by placing orders for items to be delivered automatically.
Interestingly, Americans have spent a record amount on their pets during the pandemic. The furry friends helped make time cooped up at…
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