As the stock market continues to show signs of recovery in 2024, it’s important for investors to not overlook certain companies that may be trading at a discount but have strong long-term potential. Share price alone doesn’t always tell the full story of a business, and it’s crucial to dig deeper into the fundamentals and growth prospects of a company before making investment decisions.
Two such companies that may be worth a closer look are Fiverr and Chewy. Fiverr, a platform for buying and selling gig services, has seen its stock price drop by around 40% over the past year. However, the company continues to show steady revenue growth and profitability, driven by factors such as an expanding take rate, AI investments, and the introduction of new services. With a price-to-sales multiple of around 2.3, Fiverr could be a solid buy for investors looking to capitalize on its long-term potential.
Similarly, Chewy, an online retailer for pet products, has seen its shares fall by around 60% in the last year. Despite concerns about the pet care industry and pet spending trends, Chewy’s financials remain strong, with a focus on recurring revenue through its Autoship program. The company’s solid financial performance, including a significant increase in net sales per active customer and strong free cash flow generation, make it an attractive option for investors looking for a quality business at a discounted price.
Overall, while these companies may have faced challenges in the past year, their underlying strengths and growth prospects suggest that overlooking them could be a mistake for shrewd long-term investors. By conducting thorough research and analysis, investors may find hidden gems in these discounted stocks that could offer significant returns in the future.
