Growth stocks finally seem to be bouncing back, but they’re not all the way back. Some of the market’s former darlings are still trading well below their earlier all-time highs…
Roku (NASDAQ:ROKU), Tesla (NASDAQ:TSLA), and Fiverr International (NYSE:FVRR) are clawing their way back, but they are still trading 22% to 27% below their earlier highs as of Thursday’s market close. It’s not too late to go bargain hunting.
Roku: 25% off
It’s hard not to like Roku, especially when you can get the streaming video pioneer for 25% below what it was fetching less than a month ago. There are now 51.2 million homes relying on Roku to be their streaming hub, and there’s a lot of money to be made when you have a captive audience averaging 3.6 hours a day on your operating system.
Roku’s transformation from a modestly growing hardware company into a speedster high-margin platform provider has been lucrative for its early believers. The stock is a 25-bagger since going public less than four years ago. Revenue has accelerated sharply for four consecutive years, and with platform revenue skyrocketing 81% in its latest quarter, the playing field is still ripe for Roku to improve the monetization of its expanding audience.
Tesla: 22% off
Even before the recent surge in gas prices, the country — and the world — was going electric. Tesla has the pole position in the electric vehicles (EV) market, and its rapid expansion beyond the luxury segment was timed perfectly.
Tesla was able to hand over key cards for a half-million cars last year. Bears will argue that even now at a 22% discount off its peak market cap of $837 billion, it is still overvalued. Even based on enterprise value, it trades for more than a handful of the largest auto manufacturers combined. But the naysayers are missing the big picture here.
Tesla’s grasp at the aspirational end of the EV market is shaking up what a car is worth to an automaker. It’s not just about the initial sale. The incremental revenue of over-the-air premium updates (like shelling out an additional $10,000 to unlock the car’s full driver-assist features or $2,000 for an acceleration boost) make the initial purchase a long tail of recurring revenue. Other automakers will hand off a new car buyer to the wild world of local gas stations for fuel. Tesla is there with an unmatched network of more than 20,000 Supercharger stations in prime locations.
Explosive growth awaits on…
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