- If you’re the type that throws caution to the wind, these deflated but intriguing growth stocks to buy may liven up your portfolio in the long run.
- Bloom Energy (BE): Although the fuel-cell specialist suffered a poor earnings report, the underlying message has become even more critical.
- Rivian Automotive (RIVN): Highly risky due to supply chain disruptions, RIVN is much more attractively priced now.
- Lyft (LYFT): Another risky idea among growth stocks to buy on the dip due to light guidance for the next quarter, LYFT could rise on revenge travel.
- Bill.com (BILL): Slow revenue growth in a non-pandemic-disrupted quarter has hurt BILL stock, though the end of working from home could lift shares.
- Sea (SE): Banking on the robust long-term opportunities of the Southeast Asian internet economy, SE remains one of the more intriguing contrarian growth stocks to buy.
- Ginkgo Bioworks (DNA): A treacherous idea for myriad reasons, the bioengineering aspect of DNA stock makes it interesting for risk takers.
- TeraWulf (WULF): A cryptocurrency miner, the downfall of the sector hurts TeraWulf though its longer-term potential makes for a compelling case.
Ordinarily, you don’t want to attempt to catch a falling knife simply for its own sake. Sure, in some narrowly defined contexts, you can get away with it. However, when publicly traded companies — particularly those labeled as growth stocks — shed massive double-digit losses, there’s usually a reason for it. Nevertheless, the present volatility provides possible upside returns for the long run.
The emphasis here is the long run.
And that really sums up the theme for today. Recently, we’ve seen the equities sector tumble due to myriad fears, ranging from recession to inflation to war. Ultimately, cooler heads may prevail (as it always has throughout human history) but when that will occur is anyone’s guess. Therefore, you can position yourself into these heavily discounted growth stocks but with the understanding that you’ve got to be patient.
If you can accept the risks — and have the time to see through the ambiguous waters ahead — you might want to check out these growth stocks to buy on the dip.
Bloom Energy (BE)
In my opinion, Bloom Energy (NYSE:BE) may be the perfect example of growth stocks to buy that battle-hardened contrarian investors are eyeballing. On the surface, BE stock seems the antithesis of a reasonable investment. Recently, the fuel-cell specialist released its earnings report for the first quarter and it wasn’t pleasant.
The highlight (or perhaps the lowlight) of the disclosure was Bloom Energy’s earnings-per-share, which came in at a loss of 32 cents. This figure compared poorly to the EPS loss of 11 cents that covering analysts were targeting. Further, in the year-ago quarter, Bloom presented comparatively superior optics, posting an EPS loss of 7 cents.
Still, with an aspirational and growth-oriented company like Bloom, you must focus on the bigger picture. In particular, the company’s AlwaysON microgrid solution could empower energy resilience, a circumstance that has been socially and economically problematic since the beginning of the new normal.
But with energy becoming an even more critical topic amid geopolitical flashpoints in Europe? In this context, BE is very interesting if you can handle the volatility.
Rivian Automotive (RIVN)
Let me be upfront that I haven’t been particularly enthused about electric vehicle manufacturer Rivian Automotive (NASDAQ:RIVN). It’s not that I dislike the company per say. However, with so many EV companies now competing in the heavily contested arena, it’s unlikely (in my view) that they’ll all succeed.
I mean, let’s face reality here. The average household income for those purchasing EVs is about $140,000. That’s basically twice the U.S. average. Yet there are so many EV competitors in the space, all fighting for a narrow piece of the consumer pie. It doesn’t seem realistic.
Ironically enough, it’s Rivian’s management team that appears to be more in line with reality than some of its rabid followers. Recently, it disclosed risks regarding supply chain pressures and the rising cost of raw materials.
Despite the bad news, though, Rivian does make some attractive EVs. Considering that it’s not competing in the middle-income consumer bracket, Rivian could steal some market share from premium brands like Telsa (NASDAQ:TSLA). Still, RIVN is one of the growth stocks that will require nerves of steel.
From a cursory perspective, it might be hard to understand why ride-sharing platform Lyft (NASDAQ:LYFT) suffered significant losses following its Q1 earnings disclosure. Just by the numbers, the performance was quite solid. For instance, Lyft posted revenue of $875.6 million in Q1, beating out the consensus target calling for $845.5 million.
So, what gives? Although companies love to celebrate past achievements, Wall Street is forward looking. Therefore, management’s softened guidance for Q2 convinced stakeholders to hit the exits. Essentially, the downgraded outlook reflected the worries of our time, namely inflation and rising energy costs. Subsequently, such headwinds could negatively affect consumer sentiment, which wouldn’t be conducive for LYFT and other similarly exposed growth stocks.
However, if you’re an optimistic contrarian with a patient mindset, you might want to give LYFT stock another look with these discounted levels. Given the roughly two years Americans spent cooped up in their homes, the concept of revenge travel is strong. Therefore, LYFT could be among the growth stocks to receive a downwind benefit.
A San Jose, California-based technology firm that provides automated, cloud-based software for financial operations, Bill.com (NYSE:BILL) is quickly becoming a go-to platform for the burgeoning gig economy. From the perspective of gig workers, it’s a convenient 21st century timeclock: punch in your hours worked (or whatever business metric that’s used) and off you go.
Although it’s a relevant innovation, BILL stock is suffering a rather antithetical experience. On a year-to-date basis, BILL is down 57%, with much of the losses stemming from a mixed earnings report. Although the underlying company enjoyed record customer additions, revenue in the most recently completed quarter grew by only 6.6% year-over-year. That was a much lower growth compared to the double-digit numbers seen in prior quarters.
Therefore, stakeholders took the hint: Bill.com is struggling in the post-pandemic era. However, working from home may be coming to an end because the catalyzing public health crisis is also waning. If so, the reluctant workers could join the gig economy permanently, which may support BILL as one of the growth stocks to buy.
A tech conglomerate firm headquartered in Singapore, Sea (NYSE:SE) remains one of the most frustrating ideas among growth stocks to buy. On one hand, the company is extraordinarily compelling because of its relevance to the emerging markets of Southeast Asia. But on the other hand, SE has to demonstrate this potential with positive returns.
Well, SE is returning something but nothing good across recent time frames. For instance, on a YTD basis, SE has dropped a staggering 71%. And this isn’t just a victimization of arbitrary context. Indeed, you have to go back to late May 2020 to when SE stock was trading hands this low.
If I’m being honest, it appears that the acceleration of negativity isn’t yet over. It wouldn’t be surprising to see SE drop near pandemic-lows of around $40. But if it does get that low, the $1 trillion internet economy for Southeast Asia that experts project will materialize by 2030 is enough to put me in the contrarian’s chair.
Ginkgo Bioworks (DNA)
Although an intriguing concept, Ginkgo Bioworks (NYSE:DNA) should only be reserved for the most daring of contrarians. As one of the riskiest growth stocks to buy, DNA is actually behind the eight-ball for two main reasons. First, it entered the public market via a reverse merger with a special-purpose acquisition company (SPAC). As I’m sure you’re well aware, SPACs have greatly underperformed the benchmark equities index following their business combinations.
Another factor impeding upward mobility for DNA stock is that the underlying company is aspirational. While the core focus of the company — bioengineering for the production of bacteria with industrial applications — is intriguing, it’s also fiscally flawed. For the quarter ended Dec. 31, 2021, Ginkgo suffered a net loss of $1.6 billion against revenue of only $148.5 million.
Put another way, you’ve got to be in this for the long haul.
Still, DNA could be an enticing name among growth stocks if you intend on holding it for many years. Since the coronavirus pandemic, interest in advanced scientific and medical technologies has skyrocketed.
On the surface, TeraWulf (NASDAQ:WULF) sounds like an extraordinarily compelling concept. With the cryptocurrency market representing one of the biggest paradigm shifts in the entire investing ecosystem, it only makes sense that growth stocks catered to crypto-mining operations will enjoy at least the possibility of significant upside. Further, TeraWulf specializes in sustainable mining, distinguishing it from other miners. However, a closer inspection into TeraWulf reveals a highly speculative venture.
For one thing, the company appears to be a pre-revenue firm. According to its most recent Form 10-K disclosure, “TeraWulf expects to generate revenues” through its crypto-mining endeavors, which suggests that it’s not posting sales currently. As well, the underlying digital asset market has been tanking due to global recession fears, sending WULF into the abyss.
Is that reason enough to avoid WULF stock? For most folks, the answer is yes. However, if you’re on the adventurous side, you might note that the crypto sector has proven incredibly resilient. Over the long run, it’s unlikely that the blockchain will simply fade away. Therefore, if you’re willing to lose everything in the position, WULF could be intriguing.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.