Given the market headwinds, jazzing up your portfolio with growth stocks may be counterintuitive. The stock market is pausing after posting record gains in the first half of this year. That means the best market-defying growth stocks are on sale and are ready to be snapped up.
The power of growth stocks was on full display in the past year or so. In fact, according to a report from Jefferies’ analysts, growth stocks have outperformed value stocks by a two-to-one ratio since 1991. That’s the widest margin of outperformance dating back roughly 33 years. On that positive note, here are three market-defying growth stocks you’d want to pick up at an exciting discount.
SoFi (SOFI)
SoFi (NASDAQ:SOFI) is a digital bank that continues to grow its business at a rapid clip. Moreover, through its efficient online-only model, it’s made tremendous strides in turning a net profit. However, the stock has been remarkably choppy over the years despite consistently delivering robust operating performance. Since it got its bank charter in February 2022, SOFI stock has tanked more than 40%. However, it gained a healthy 37% last year, but it’s now back in the red, shedding over 29% year-to-date (YTD).
Nevertheless, as mentioned earlier, SoFi is marching forward with aplomb in terms of fundamentals. It has bested revenue estimates since the second quarter (Q2) of 2021 and recently wrapped up its second straight quarter of GAAP profitability.
Its first-quarter (Q1) report showed it trouncing top-and-bottom-line estimates again with $645 million in net sales and $88 million in GAAP net income, representing a 14% profit margin. Moreover, it added 622,000 new members, taking its membership tally to more than 8.1 million, a 44% bump from last year. Additionally, it raised its fiscal year (FY) 2024 forecasts, expecting an impressive 37% increase in sales on a year-over-year (YOY) basis.
Overall, there’s a lot to like about SOFI stock at this point, especially considering it’s down 73% from its all-time high of $25.78.
Pinterest (PINS)
Pinterest (NYSE:PINS) is an image-based social media platform that’s been killing it lately. Though the broader market’s in a slump, PINS stock has surged more than 22% this month. It’s about time, though, that investors start paying attention to Pinterest again following its superb post-pandemic recovery.
Its recently released Q1 report was another blockbuster that annihilated analyst estimates across both lines. Moreover, its monthly user base reached a record 500 million for the first time, a major breakthrough for its business. Revenues were up 23% to $740 million, besting analyst estimates by $40 million. Additionally, its belt-tightening measures were a success, marked by a 6% drop in costs, resulting in a dramatic 78% reduction in operational losses to $54.4 million.
Hence, there’s a lot to like about Pinterest, especially because it is a consistently profitable enterprise. During market downturns, investors often flock to these businesses, seeing them as safe havens amid the turbulence.
Disney (DIS)
Disney (NYSE:DIS) CEO Bob Iger will have breathed a sigh of relief after prevailing in a proxy battle against billionaire investor Nelson Peltz. Nevertheless, Mr. Iger has plenty to prove to investors before they can jump on its bandwagon again.
Disney’s business has been lousy, and a lot of it has to do with the box-office bombs it has been releasing over the past few years. My fellow InvestorPlace contributor Rich Duprey writes that “Disney abandoned the family-friendly fare it was famous for to immerse itself in the culture wars.”
However, the company is getting serious about getting its entertainment division back on track again. Mr. Iger announced the company will release no more than three Marvel films and up to two Disney+ shows annually. Hence, the focus is more on quality than dishing out a laundry list of forgettable TV shows and movies. Additionally, the company’s dependable Experiences segment continues to shine with double-digit growth, complemented by a 2% increase in its Sports segment. Given these developments, DIS stock has the potential to reverse course and offer stellar upside potential ahead.
On the date of publication, Muslim Farooque 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.