Is it time to buy growth stocks?
Due to substantial volatility and market fearfulness, many investors are asking that question. To optimize investing in growth stocks, it is important to purchase them when undervalued.
The growth stocks listed below have hit what investors hope is rock bottom this year. Between a fatal bank run at Silicon Valley Bank and high interest rates that no longer favor tech companies, many former industry leaders have seen their stocks fall hard.
Analysts expected 2023 would be a tough year for growth stocks. But for the big-name companies listed below, it has been their worst year yet so far. Continue reading to discover which cheap growth stocks to invest in.
Is It Time To Buy Growth Stocks? – Lyft Inc. (NASDAQ: LYFT)
Lyft is the second largest ride-sharing service provider in the United States and Canada, connecting riders and drivers over the Lyft app. Incorporated in 2013, Lyft offers a variety of rides via private vehicles, including traditional private rides, shared rides, and luxury ones. Besides ride-sharing, Lyft also has entered the bike and scooter share market to bring multimodal transportation options to users.
Lowest Closing Price: $8.46 on March 13, 2023
Highest Closing Price: $78.29 on March 29, 2019
Why Stock Has Dropped: Lyft fell roughly 35% on Feb. 10 after it announced it would earn $975 million in revenue in Q1 2023. This is below the $1.09 billion Wall Street expected.
Is It Trading At A Good Deal? For long-term investors, Lyft might have some attractive upside potential. The company’s Q4 2022 revenues beat expectations ($1.18 billion reported vs $1.16 billion forecasted) and it also posted a higher earnings per share ($0.29 vs $0.13). In the short-term, however, the stock will likely be volatile, as the company is struggling to attract passengers and drivers post-pandemic.
Is It Time To Buy Growth Stocks? – Warby Parker Inc. (NYSE: WRBY)
Warby Parker, Inc. operates as an online retailer of eyewear for men and women. It engages in the business of selling eyewear products and providing optical services directly to consumers through its retail stores and e-commerce platform. Its products include eyeglasses, sunglasses and contacts.
Lowest Closing Price: $9.69 on March 17, 2023
Highest Closing Price: $59.50 on November 17, 2021
Why Stock Has Dropped: The eyewear retailer reported net losses of $20.3 million in its latest Q4 report.
Is It Trading At A Good Deal? Warby Parker narrowed its Q4 losses and opened 40 new stores last year. It also grew net revenues by 10.6% in 2022. That said, the company’s operating costs are still higher than its profits. Its share price will likely remain low until it can start making more money than it’s spending.
Is It Time To Buy Growth Stocks? – Black Rifle Coffee Company (NYSE: BRCC)
Black Rifle Coffee Company is a coffee company based in Salt Lake City, Utah, owned by members of the armed forces of the United States. The company offers roasted coffee products, as well as apparel, cups, mugs, tumblers and gift items.
Lowest Closing Price: $5.01 on March 22, 2023
Highest Closing Price: $33.11 on April 11, 2022
Why Stock Has Dropped: Management gave weak guidance for 2023. Previously, analysts had expected the company to generate $500 million in revenue for the full year. On March 16, it readjusted and now expects net revenue between $400 million and $440 million.
Is It Trading At A Good Deal? Investors may find Black Rifle to be a good deal at this price. The veteran-owned coffee producer has attracted its own audience of coffee lovers and veterans. It also has a lucrative partnership with Walmart. The only concern is demand. If revenues continue to fall, it could mean fewer consumers are buying its bagged coffee.
Is It Time To Buy Growth Stocks? The Bottom Line
The U.S. stock markets are going through an unusually volatile period, thanks to the uncertainty posed by the global banking crisis and the Federal Reserve’s plan for continued interest rate hikes. While wild price swings can be nerve-racking for shareholders, volatile markets can also be a great time to pick up shares trading at a discount. So, is it time to buy growth stocks? Yes, but only if traded at a discount.
