If you like bargain-shopping, there’s certainly no shortage of stocks to consider right now. The growth-oriented Nasdaq Composite (NASDAQINDEX: ^IXIC) is down more than 16% year to date, and currently sits nearly 20% below its November peak. In that it’s a composite of all Nasdaq-listed names, that means some of its constituent stocks have done much, much worse.
In a few of those cases, however, the drubbings are overdone. Here’s a look at three of the Nasdaq’s most beaten-down tickers primed to bounce back sooner or later, and probably sooner than later.
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MongoDB (NASDAQ:MDB) may not make an exciting product, but that doesn’t mean it’s not an exciting company… from an investor’s perspective. Last year’s top line of $874 million was 48% better than 2020’s revenue, and analysts are modeling sales growth of more than 34% this year.
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Better still, the database solutions company is inching toward actual profitability. At its current pace it should work its way out of the red sometime in 2025, or perhaps even sooner if its fourth-quarter results are any indication. Investors were expecting a loss on the order of $0.20 per share, but MongoDB only reported a per-share loss of $0.09.
The beat helped, to be sure. Shares bounced nearly 19% on Wednesday, in fact, in response to the solid fourth-quarter print reminding investors just what a powerhouse this company is. Even with the big gain, though, MongoDB is still trading more than 40% below its late-December peak. That makes it a very juicy prospect now.
If you’ve been keeping tabs on DraftKings (NASDAQ:DKNG), then you likely know CEO Jason Robin recently tweeted: “If you sold #DKNG today, just be aware that my team and I are on a mission to make you regret that decision more than any other decision you’ve ever made in your life .” The day in question was Tuesday, when DraftKings stock fell to a relatively modest 4%, but capped off what’s become a 73% pullback from September’s highs. Yikes.
Veteran investors will recognize the theatrical rhetoric as something a frustrated CEO would say when his company is doing everything right, yet none of it stops that company’s stock’s route. The thing is, Robin may actually be quite right.
While it’s clearly a long-term project, the key to DraftKings’ recovery is the impending growth of the online sports betting market. It’s only legalized in about half of US states right now, and DraftKings is only currently licensed to offer its sportsbook app in 17 of those states. And, even where betting on sports is now legal, the business is clunky, and many consumers remain uninformed about their options.
All of this is changing, though. Another handful of states are currently considering legislation that would legalize sports betting in their jurisdictions (which of course generates tax revenue), keeping the well-established legalization streak alive. And, as Ark Invest’s Nick Grous recently commented of the legalization movement’s momentum, “[T]he handle for online sports betting could scale 10x from roughly $18 billion to $180 billion.” That’s huge.
Finally, add Zebra Technologies (NASDAQ:ZBRA) to your list of beaten-down Nasdaq names to buy before the market figures out it made a major mistake.
You may be more familiar with the technology company than you realize. Zebra makes a variety of specialized technological products ranging from handheld computers to printing supplies to robots that can automatically pick and pull consumers’ online orders of goods. If it involves a barcode (or can), Zebra can handle it. It’s even got solutions for financial institutions, in fact. Just a few days ago, Wisconsin’s North Shore Bank tapped Zebra to streamline in-branch personnel’s routines.
All of its wares are in demand, even if they’re not necessarily cutting-edge stuff. This is why sales growth is holding pretty steady from one year to the next, projected to improve about 6% this year as well as next year. Earnings are growing at a slightly faster clip.
This reliable progress hasn’t prevented the stock from sliding 36% since late December, running into new 52-week lows in the process. Now priced at less than 20 times this year’s projected per-share profits, though, a rebound may well be in the offing.
The kicker: Zebra Technologies hasn’t failed to top any quarterly earnings estimates for a couple of years now.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool owns and recommends MongoDB and Zebra Technologies. The Motley Fool has a disclosure policy.