5 Struggling Stocks to Buy at a Discount – The Motley Fool

These stocks may be trading down, but their businesses are stronger than ever.

Key Points

  • Some investors are worried that the next market crash or correction could be near.
  • Investors with cash to spare should be taking full advantage of the stocks trading on sale right now.
  • From healthcare to travel to tech, these discounted stocks are leading the way in their industries.

It’s not exactly a secret. The market has had a tough time lately. Stocks have been all over the place, facing fresh volatility due to ongoing concerns about the COVID-19 pandemic, inflation, months of mixed job report numbers, and the possibility of another correction. This past earnings season there was a consistent pattern noted by investors; companies reported strong growth, albeit sometimes slowed from the earlier days of the pandemic, and shares still fell promptly. 

Volatility has plagued many sectors of the stock market lately. But does this mean investors should run for the hills? Absolutely not. Right now, forward-thinking, long-term investors have a prime opportunity to buy great stocks with high-quality businesses at a serious discount. And these days, bargain stocks are in abundant supply. 

If you’re going bargain shopping as we close out 2021 and head into the New Year, these are five unstoppable stocks to consider adding to your portfolio at a discount. 

Person looking at financial charts on computer.

Image source: Getty Images.

1. Fiverr 

As “The Great Resignation” drags on and Americans keep quitting their jobs in record numbers, many are turning to freelance work as a means of achieving more flexibility with their career and pursuing financial freedom. Shares of the freelance marketplace Fiverr International (NYSE:FVRR) are down 47% over the past year, but its business continues to thrive.  

In the most recent quarter, the company reported that revenue was up 42% year over year while active buyers and active spending per buyer popped by respective amounts of 33% and 20% from the year-ago period.

In a recent study surveying more than 1,000 U.S. hiring managers and human resource professionals, Fiverr found that 54% of them “said that workers leaving their companies are not reentering the workforce — and instead they are choosing to work for themselves.” The study also found that 30% “said that people are leaving their jobs more now than pre-COVID because they want more flexibility.”  

As one of the largest freelance platforms around, Fiverr will continue to benefit from this rapidly changing workforce as people question when, where, and how they want to make money, not only during a once-in-a-lifetime pandemic but beyond. Now looks like a great time for patient investors to scoop up this premium stock on sale. 

2. Teladoc 

Few stocks garnered the hype that Teladoc Health (NYSE:TDOC) did in the earlier days of the pandemic, but the shares have now fallen considerably from their all-time high — down a whopping 54% over the past year. Yet, as has been the case with many fallen stocks this year, Teladoc’s business and growth prospects still look great. 

Teladoc is the industry leader in a market that is expected to hit a valuation of $225 billion by 2030. In the first nine months of this year, not only was Teladoc’s revenue up 108% compared to the same period of 2020, but total visits on its platform rose an incredible 59%.

While Teladoc’s bottom line is still weighed down by costs associated with its purchase of Livongo in 2020, the company is profitable on an adjusted EBITDA basis and expects to nearly double its revenue this year over last year. If you want to invest in a top healthcare company with durable long-term growth potential and a thriving business, Teladoc is a smart stock to buy right now. 

3. Zoom 

Speaking of beaten-down stocks, the market has not been kind to Zoom Video Communications (NASDAQ:ZM) lately. In fact, the stock is down a stunning 53% over the past year. I took full advantage of Zoom’s bargain price earlier this year, and the company’s consistently stellar financial results continue to reinforce my confidence in that decision. 

It’s true that the company isn’t growing at the same rate as it was earlier in the pandemic, but it was only natural to expect an adjustment as more people settle into a mixture of remote, hybrid, and back-to-the-office work situations. Even so, the company’s revenue surged 35% year over year in the most recent quarter while its net income jumped 72% from the year-ago period. In addition, the number of customers contributing more than $100,000 in trailing-12-month revenue was up by — wait for it — 94% to 2,507 compared to the same quarter in 2020.

Not only is the company highly profitable, it’s also doing an excellent job of retaining and expanding upon its customer base. If you’re searching for a high-quality tech stock trading at a bargain, Zoom is a no-brainer pick to consider. 

4. Chewy 

Chewy (NYSE:CHWY) is trading about 48% lower from a year ago amid the broad slowdown of growth stocks and the normalizing of business activity compared to 2020. That said, the online pet retailer is still in tip-top shape from a business standpoint.  

Chewy has an incredibly diverse business that is rapidly expanding — from supplies, bedding, food, and toys to prescription drugs through its online pet pharmacy. Chewy even has a telehealth service allowing pet owners to connect with licensed vets for just $14.99 per chat or $19.99 per video call. The company is quickly proving itself to be an all-in-one solution for a broad range of its customers’ pet needs.  

In the first nine months of 2021, Chewy’s net sales grew 27% over the year-ago period. While the company still isn’t profitable, Chewy did reduce its net loss by an impressive 91% vs. the same period in 2020. The company closed out the third quarter with 20.4 million active customers, a 15% jump from last year. With the stock currently trading below $60, now seems an excellent time to take a second look at the company.  

5. Airbnb 

Last, but certainly not least, is a stock I have become increasingly intrigued by in recent months. Airbnb (NASDAQ:ABNB) is not a new name to most investors. But the company only made its public debut about a year ago in what was arguably one of the worst periods the travel industry has ever seen. Shares of the company are actually up more than 15% year to date, but have fallen about 7% over the past month amid ongoing stock market volatility.  

While the company had a bumpy start to 2021, it’s made significant strides with each earnings report — so much so that the most recent quarter blew both analysts’ and investors’ expectations out of the water. Not only was its third-quarter revenue of $2.2 billion the highest recorded in Airbnb’s history (up 70% year over year and 36% from the same quarter in 2019), but its net income popped to its highest-ever level, jumping 280% from the year-ago period. And compared to the third quarter of 2019, Airbnb’s net income was up an astonishing 213%.

Airbnb’s third quarter was also its first quarter ever where adjusted EBITDA surpassed $1 billion ($1.1 billion, to be exact). Not only are more people booking Airbnb stays than ever before, but the company’s long-term stays (28 days or longer) comprised 20% of the company’s gross nights booked during the three-month period.  

As more people are traveling again, they are also changing the way they travel. Whether to accommodate a work-from-home lifestyle, enjoy the comforts of home while away from home, or another reason, Airbnb is going to be a part of that future even as we move through different phases of the pandemic. Now looks like an excellent time to invest in this stock and capitalize on its serious growth potential.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Rachel Warren owns Teladoc Health and Zoom Video Communications. The Motley Fool owns and recommends Airbnb, Inc., Chewy, Inc., Fiverr International, Teladoc Health, and Zoom Video Communications. The Motley Fool has a disclosure policy.

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