You might not be thrilled with what I’m about to say, but stock market corrections and crashes are a normal part of the investing experience. On average, the broad-based S&P 500 has navigated its way through a decline of at least 10% every 1.87 years since the beginning of 1950…
However, crashes, corrections, and periods of panic also beget opportunity. Although emotions are responsible for driving the short-term movements in stock prices, it’s a combination of operating earnings growth, innovation, and execution that lift the valuations of high-quality companies over the long run.
Following the recent correction in the tech-heavy Nasdaq Composite, five of the market’s fastest-growing stocks — as measured by their compound annual growth rate (CAGR) — are now on sale. If you act quickly enough, you just might be able to secure a bargain.
Zoom Video Communications: 5-year estimated CAGR of 40.9%
One of the top bargains that opportunistic investors can consider scooping up is leading web conferencing company Zoom Video Communications (NASDAQ:ZM). Since hitting an all-time closing high in October, shares of the company have declined by 39%, through this past weekend. But according to Wall Street’s consensus sales projections, average annual revenue growth over the next five years should clock in at almost 41%.
While work-from-home was a big trend during the pandemic, perhaps no company benefited more than Zoom. Having the traditional workspace completely disrupted meant businesses needed to turn to technology to keep in touch and advance projects. Based on data from Statista and Datanzyne in April 2020, it was Zoom that became the default web conferencing platform. In the U.S., it controlled close to 43% of web-conferencing share, which was 24 percentage points higher than its next-closest competitor.
What really stood out in Zoom’s breakout year was how well the service resonated with businesses of all sizes. In particular, the company’s freemium model drew in a number of small and medium-sized businesses, and ultimately hooked them on upgrading to a paid service. Even when workers return to the office, Zoom’s conferencing services aren’t going anywhere.
Teladoc Health: 5-year estimated CAGR of 39.2%
If healthcare stocks are more your thing, you could pile into Teladoc Health (NYSE:TDOC), which has shed 33% of its value over the last month. According to Wall Street, Teladoc is on pace to generate average annual revenue growth of 39% over the next five years.
Similar to Zoom, Teladoc was a logical beneficiary of the pandemic. With physicians wanting to keep at-risk people and potentially infected patients out of their offices, they turned to telehealth services. Last year, Teladoc handled 10.59 million virtual visits, which was up 156% from the 4.14 million handled in 2019.
Though worries persist that growth could slow in a post-pandemic environment, this is highly unlikely. That’s because the value of telehealth is too massive to ignore. It’s much more convenient for patients, allows physicians to keep closer tabs on patients with chronic health conditions, and is generally billed cheaper than office visits. This last part makes telehealth a favorite among insurers.
Further, with Teladoc acquiring the leading applied health signals company Livongo Health in early November, it now has…
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