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2 Growth Stocks To Consider: PINS and ZM
While these two equities have become significantly cheaper as a result of the downturn in the market during 2022, their long-term fundamentals still remain strong
However, the market's present "bearish" outlook is likely to have some merit. It's uncertain how quickly the Fed will have to tighten the money supply and boost interest rates to bring inflation back under control. Now for many investors, especially the younger ones, this may be the first time they've ever encountered such a terrible and prolonged market drop. As a result, it's unknown how the market's collective psychology will react to the current stress.
As a long-term investor, though, the market sell-off we've witnessed thus far in 2022 offers chances. Many exceptional firms are currently selling at lower values than they have been in a long time. Many growth firms with solid fundamentals are being punished almost as harshly as their riskier counterparts.
PINTEREST INC. (PINS)
Pinterest (PINS), a real pandemic winner, had what most investors would describe as exponential growth over a short period of time. With the enactment of the lockdowns, there was a rise in social media interest, a rising tide that lifted all online boats to a rather significant extent.
PINS stock soared from roughly $20 per share for the majority of 2019 and 2020 to over $80 per share at its peak. It's back to the $20 level as of Tuesday.
ZOOM VIDEO COMMUNICATIONS INC. (ZM)
For the better part of 2020, Zoom Communications (ZM) was an outstanding outperformer. This stock soared from under $100 per share to over $560 per share by the end of the year. Since then, it has declined in a somewhat orderly manner and it is currently trading below the $100 mark.
Many basic valuation indicators show that ZM is more of a value stock than a hyper-growth business. With a price-to-earnings ratio of roughly 20, investors are getting a 5% earnings return on a firm that has grown revenues by 55% in the last year. Looking at the stock chart, it's evident that the market believes that kind of increase won't happen again.
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