The recent pullback in high-growth tech stocks provides investors a chance to purchase quality companies at a lower multiple. While investors are worried about the threat of rising interest rates, steep valuations, the Omicron variant as well as high inflation numbers, it's impossible to time the market. Instead, every major dip in a company's stock price should be viewed as a buying opportunity for long-term investors.
Let's take a look at three beaten-down tech stocks you can buy right now.
A company operating in the streaming space, Roku (NASDAQ: ROKU) went public in late 2017 and has returned a monstrous 654% in just over four years. However, its also down 63% from record highs, valuing the stock at a market cap of $23.8 billion.
In Q3 of 2021, Roku increased sales by 51% year over year to $680 million and average revenue per user was up 49% at $40.10 while active accounts surged by 23% to 56.4 million. This stellar growth allowed Roku to more than double its adjusted EBITDA to $130.1 million in Q3.
In Q3, The Roku Channel was a top-five channel on the platform in terms of active account reach as streaming hours doubled year over year. There were multiple catalysts that fueled this growth including the expansion of its strategy as Roku licensed content from more than 200 content partners.
The Roku Channel is expected to act as a flywheel for the streaming heavyweight and should help to grow user engagement over time which in turn will accelerate ad sales.
Valued at a market cap of $61 billion, MercadoLibre (NASDAQ: MELI) shares are down almost 40% from all-time highs. MercadoLibre operates e-commerce platforms in Latin America and grew sales by 86.6% to $4.9 billion in the first three quarters of 2021. Its net income rose by over 100% to $129.4 million in this period.
MercadoLibre's management has claimed that new user growth continues to accelerate, a trend that began at the start of COVID-19. Further, the company has experienced an uptick in transactions per buyer driving the stock to record prices last year.
Analysts tracking the stock expect sales to rise by 75.3% to $6.97 billion in 2021 and by 35.3% to $9.43 billion in 2022. So, MELI stock is valued at a forward price to 2022 sales multiple of 6.5x which is not too steep.
The final growth stock on my list is Coupang (NYSE: CPNG) which is down 50% from 52-week highs. A South Korea-based e-commerce company, Coupang successfully provides same-day or next-day delivery to customers on most orders. Coupang has focused on creating a robust logistics network to meet its lofty shipment goals.
In Q3 of 2021, the company increased sales by 48% year over year to $4.6 billion. In the last 12-months, Coupang sales have touched $17.11 billion, up from just $4.05 billion in 2020. It values the stock at a trailing price to sales multiple of just 2.5x. The company's revenue should continue to gain pace in the upcoming quarters, given its plans to expand in Taiwan and Japan.
Analysts tracking the stock expect it to rise by 46% in the next 12-months. Comparatively, shares of MercadoLibre and Roku are trading at a discount of 69% and 107% respectively to analyst estimates.
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