3 Technical stocks decrease 37% to 60% for purchases for 2022

3 Technical stocks decrease 37% to 60% for purchases for 2022

a A wide range of technology stocks have been sold off by the market over the past few months. Seasoned investors know that this kind of market distress is temporary. Stocks of strong growth companies will bounce back as these companies continue to perform.

Given market conditions, three long-time investors have picked stocks that took a chin recently but are great buys for next year. they chose HubSpot (NYSE: Centers)And Explode, Explode (NYSE: SNAP), And Zoom video communication (NASDAQ: ZM), which has retreated from its highest levels from 37% to 60%.

Two of my co-workers collaborate in the office using masks.

Image source: Getty Images.

Stuck in the shadow of evil technology

Danny Vina (@HubSpot): It wasn’t long ago that investors were applauding HubSpot, pushing the software-as-a-service (SaaS) stock to an all-time high. Now, just two months later, the company has suffered a wealth reversal, with the stock down nearly 40%. What has changed during that time? In a word: nothing.

From an investment standpoint, HubSpot has continued to implement its vision, with no company-specific news leading to a pullback. The company is expanding beyond its in-house marketing roots on its journey to become a full-service CRM platform.

That doesn’t mean HubSpot has given up on the inbound marketing it pioneered, changing the way advertisers attract potential customers. The company continues to focus on brand awareness and marketing automation, getting to know customers wherever they are. This includes providing useful content on social media, blogs and events, developing effective content marketing, search engine optimization, and more.

However, HubSpot also continues to actively follow the rules of the game used by Salesforce.com, is rapidly expanding its suite of services, which now includes marketing, sales, service support, content management, and operations solutions.

The company recently announced a significant addition to its large and growing ecosystem, debuting Operations Hub for Enterprise. Perhaps most telling of its future prospects was the introduction of HubSpot Payments, an end-to-end proprietary digital payment tool, which was integrated directly into other tools on its platform. By providing a payments solution developed specifically for enterprises and catering to the needs of B2B commerce, HubSpot has made their solution more stable.

HubSpot’s impressive growth rate continued last year. During the first nine months of 2021, revenue grew 48% year over year, with subscription revenue also up 48%. Third-quarter growth accelerated to 53%, showing its business resilience and enduring prospects. Earnings remain elusive as HubSpot chases market share, but writing is pending, with free cash flow up 275% over the prior year period, illustrating the ability to leverage its platform.

The company’s customer metrics are equally compelling. HubSpot grew its total customer base to 128,144, an increase of 34% year over year, while its average subscription revenue per customer increased by 9%. This represents a group decrease compared to the total addressable market (TAM) of over 3 million small to medium-sized businesses with a website.

With each expansion of a neighboring company, HubSpot has gradually increased TAM, which one analyst now estimates at $87 billion. Compared to its 2020 revenue of $883 million, the company is currently processing less than 1% of its market opportunity, leaving plenty of room for growth.

Recently, HubSpot fell victim to a condition that penalized many high-growth and tech stocks, giving informed investors the opportunity to purchase this incredible growth at a 40% discount. Get posts when it’s hot. This sale will not last long.

A person using a smartphone at home.

Image source: Getty Images.

At a lower price point, this social media stock should make a comeback

Will Healy (pop, explode): Snap continues to decline after benefiting from a massive rise during the pandemic. The stock rose more than tenfold between March 2020 and November 2021.

However, some red flags for Snap’s future and a loss of third-quarter revenue have led to a nearly 50% drop since late September. where An appleThe iOS update made it more difficult to track the success of ad campaigns, and increased uncertainty about inventory. Also, third-quarter revenue was $1.067 billion, up 57% from last year’s levels. Despite this massive increase, revenue came in about $32 million less than consensus estimates.

However, the current price-to-sales ratio is now 18, the lowest since the fall of 2020. While that may sound high, Snap stock could justify this growth for two reasons. First, Snap appears to be in a position to maintain significant growth rates. Analysts expect revenue growth of 60% in 2021 although they also believe it will slow to 39% in 2022 with issues related to iOS.

Secondly, Snap has revived its business amid intense competition from the sites it manages ID pads When he figured out how to monetize that platform. With these efforts, this has funded user growth and allowed him to further his vision of on-camera computing.

These efforts have revived user growth that had previously been stagnant. As of the third quarter, it had 306 million daily active users, an increase of more than 20% year-over-year for the fourth consecutive quarter.

Moreover, these efforts have made Snap’s stock a standout stock. Its potential is so powerful that Jeffreys analyst Brent Thiel argued in an interview with Yahoo! That Snap was “ahead” of Facebook in the metaverse. A cited technology that allows users to create and manipulate virtual emoji when making this claim.

Still, Snap faces challenges. At a market capitalization of $69 billion, Snap remains a small portion of Meta’s $920 billion market capitalization. Also, challenges with Apple are still a headwind. However, with significant user and revenue growth, the stock can still command a premium. If investors increasingly view Snap as a metaverse, its 18 P/S ratio could look like a buying opportunity.

Someone in the video conference from the home office.

Image source: Getty Images.

Excellent player at a great price

Brian Withers (enlarge): Zoom’s video communication platform has been a springboard during the coronavirus pandemic. We’ve turned to Zoom for just about any social interaction, whether it’s for work or pleasure. Despite its popularity, the stock is down more than 60% from its high. Today, this appears to be a great value for long-term investors. Let’s take a look at why.

Measure

Q3 FY20

Q3 FY21

change (annual)

Q3 FY22

change (year)

he won

$167 million

777 million dollars

365%

1,051 million dollars

35%

> 100,000 USD for ARR . clients

546

1,289

136%

2,507

94%

Remaining performance obligations

517 million dollars

1,631 million dollars

215%

2,456 million dollars

51%

Data source: Company earnings releases and presentations. ARR = Annual Recurring Revenue.

First, it works fine. The company has set strong growth numbers for its importance, large customers, and remaining performance commitments. These gains were on top of the huge gains that occurred in the previous year. In addition, it is in a much better cash position and profitability than it was two years ago. Cash and marketable securities totaled $5.4 billion, nearly seven times more than the $811 million Q3 fiscal year 2020 figure. Operating cash flow grew to $395 million from $62 million over the same two years, a sixfold increase. Finally, operating margins improved significantly to 28% from negative 1% in the same quarter two years ago.

Looking ahead, investors won’t see triple-digit year-over-year growth numbers during the pandemic’s peak. For the next quarter ending January 31, 2022, management expects revenue to grow 19% year-over-year. This revenue growth of about 20% per year is likely more representative of the new normal. These are solid growth numbers for a business of $4 billion annually.

This reminds me of another powerful program, Adobe. Creative Cloud and document management have similar growth, profitability, and price-to-sales numbers. Over the past five years, Adobe has grown around 20% year-over-year, is making solid profits, and currently has a price-to-sales ratio of 18. Over the past five years, Adobe’s stock has grown by 390%, clearly outperforming the market.

Today, Zoom’s price-to-price ratio is at an all-time low of 14. As hybrid work and virtual events continue, Zoom will likely follow in Adobe’s footsteps and achieve 15%-20% annual growth over the next five years. Investors would do well to get a few shares of this video communication platform today.

10 stocks we like better than HubSpot
When our award-winning analyst team has stock advice, they can pay to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Stock AdvisorThe market tripled. *

They just revealed what they think are the ten best stocks investors can buy right now…and HubSpot wasn’t one of them! That’s right – they think these 10 stocks are the best buys.

See the ten stocks

*Stock Advisor returns as of December 16, 2021

Randy Zuckerberg, former director of market development and spokesperson for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Brian Withers owns Zoom Video Communications. Danny Vena is owned by Adobe Inc. and Apple, HubSpot, and Meta Platforms, Inc. and Zoom Video Communications. Healy will not have a position in any of the stocks mentioned. The Motley Fool owns and recommends Apple, HubSpot, and Meta Platforms, Inc. and Salesforce.com and Zoom Video Communications. Motley Fool recommends Adobe Inc. It recommends the following options: long calls in March 2023 worth $120 on Apple and short calls in March 2023 worth $130 on Apple. Motley Fool has a disclosure policy.

The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.

Leave a Comment

Your email address will not be published. Required fields are marked *