Nasdaq Sale: 3 Smart Stocks to Buy Now

This Nasdaq Composite fell into correction territory last week. Investors never like to see stocks fall, but declines and corrections are inevitable, as are crashes and bear markets. If you’re in it for the long haul, and you should be, you can pass on this without breaking a sweat. Alternatively, you can find a bargain stock to buy before the Nasdaq goes even higher. Global-e Online (GLBE -2.85%), Year (YEAR -0.92%)AND SoFi Technologies (SOFI) these are three great choices.

1. Leading e-commerce player with a niche business

Global-e is the brain behind a growing percentage of global e-commerce. It deals with cross-border e-commerce for retailers, and with a growing list of high-profile clients and improving profitability, it could be a standout stock to own in the long run.

Revenue growth has been slowing over the past few quarters, reflecting the state of retail overall. Sales were up 24% year over year in Q1 2024, and gross merchandise volume was up 32%.

But profitability metrics continue to trend in the right direction. Gross profit rose 36%, outpacing revenue growth and leading to a 3.9-basis-point increase in gross margin. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $14.5 million to $21.3 million, and net loss improved from $43.1 million to $32.1 million.

Global-e shares are down almost 60% from their peaks. Investors are often pessimistic in these situations because a young company needs to reach a certain level of scale to become profitable. If growth slows down too much before the company starts turning a profit, the market senses danger.

There is a mismatch here between how the market values ​​Global-e stock and what Wall Street sees. Wall Street firmly considers Global-e stock a buy and expects the price to rise over the next 12 to 18 months. Wall Street is not the final word on the matter, but analysts believe the growth factors and a well-run business outweigh the external headwinds.

As it grows, volatility is to be expected, but as Global-e continues to grow and its stock value continues to decline, smart investors with a high risk tolerance should take advantage of this situation.

2. The best streaming system in the US at a bargain price

Roku finally made progress last year, and the market was starting to sense it before the company was criticized earlier this year. The fall was a combination of events, including unmet expectations and a competitor’s threat. Not only did it not recover, it has fallen even further since.

Roku missed analysts’ expectations for a fourth-quarter 2023 loss per share by $0.03, following the news that Walmart took over the competitor of the Year Visionwhich has never been a big competitor to Roku. Combined with overall pressures in streaming and retail, that was enough to send Roku shares into a nosedive. Roku beating expectations for a loss per share over the past two quarters by a wide margin wasn’t enough to turn the tables on the market.

Meanwhile, Roku’s profits were strong. Accounts rose 14% in the second quarter, but hours watched grew even faster, up 20% year over year. The company drove more viewers to its platform by selling more streaming devices, one of its business segments. It grew its platform business, its other business segment, by adding hours watched.

Management continues to return to profits after the pandemic-induced demand slowdown and is making progress. The company has had positive free cash flow and adjusted EBITDA for four consecutive quarters, and it expects to improve its net loss from $330 million last year to $65 million this year. If it can beat that, the market could finally reward it.

Roku is gaining popularity as more and more cable-diving consumers decide to buy shares of the system. In a few years, you’ll wish you had bought shares today.

3. This digital bank could be in the top ten

SoFi’s management projects that it will eventually become a top 10 bank. That’s a long-term goal, as it ranks 74th on the list of the largest banks in the U.S. by assets. But it has its eye on the target and continues to see impressive growth.

One way it wants to move up the list is by expanding its collection of services. This could attract interest from new members and generate more engagement with the platform among existing members. It could also shift some of its business away from its core lending business, which is a higher risk in this environment and a higher risk in general from being overly concentrated in one segment.

That’s the foundation of its growth strategy, and it’s paying off. Financial services revenues were up 80% year over year in the second quarter, and management expects them to be even higher for the full year. It also has a technology platform segment called Galileo, which is a financial infrastructure for business customers. It’s not growing as fast, but it’s another layer of expansion that provides opportunities and cushions against pressures in other segments.

It certainly seems to be working. SoFi added 643,000 new members and even more new products in Q2 and boasted its third straight quarter of positive net income. Those trends are expected to continue. But the market is focused on pressure in the lending segment, and SoFi stock has fallen sharply this year.

The SoFi model works, and if you can handle volatility and have a long-term perspective, SoFi stock should pay off for you in the long run.