As Wall Street traverses stormy waters, the Nasdaq Composite has been a rollercoaster of market performances over the years. This tech-driven index has endured both bullish and bearish runs, with the aftermath of the recent Nasdaq bear market leaving the index 4% below its previous high. Navigating these tumultuous times has left investors pondering the fate of growth stocks, but it also presents an entrancing opportunity to secure promising leaders

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Over this 26-month period, the doldrums of growth stock stagnation have lured some investors into a sense of misfortune. However, for astute long-term investors, these times of market despair offer an exclusive window to acquire growth stocks, trailblazers, and industry torchbearers at a perceived bargain. Hence, let’s unravel four spectacular growth stocks poised to ascend from the ashes of the Nasdaq bear-market decline.

PayPal Holdings

Dive into the first stunning growth stock that could make you rue the day you didn’t seize the opportunity amidst the Nasdaq’s resurgence from the bear-market abyss: PayPal Holdings (NASDAQ: PYPL). Although the digital-payments sector is heating up with intense competition, PayPal wields the necessary artillery for triumph.

To begin with, it stands at the vanguard of one of Wall Street’s swiftest growth trajectories. A forecast from the Boston Consulting Group pegs annual fintech revenue to surge nearly sixfold, from $245 billion to $1.5 trillion, between 2022 and 2030. This estimate, if nothing else, emphasizes how nascent the digital-payment adoption truly is.

Despite stagnant active-account growth, PayPal’s user engagement among active accounts has never been higher. Over the last three years, active accounts have escalated from an average of 40.9 transactions to 56.6 transactions over the trailing-12-month period as of Sept. 30, 2023. With the crux of PayPal’s revenue stemming from fees, increased transactions ought to translate to amplified gross profit.

The appointment of Alex Chriss as CEO marks a pivotal moment for PayPal. Chriss, formerly of Intuit, spearheaded the company’s small business-focused segment. Chriss comprehends the small merchants’ innovations and prospects at PayPal and is unafraid to make difficult decisions that prune operating expenses and fortify the company’s margins.

Moreover, PayPal stock is ostensibly more affordable than ever as a publicly traded entity. At present, shares can be procured for less than 12 times forward-year earnings. Considering the company’s long-term growth potential, preeminent position in the fintech space, and aggressive share-repurchase program, it represents a compelling value proposition.

Lovesac

Another sensational growth stock you’ll lament not seizing during the Nasdaq bear-market downturn is the furniture company Lovesac (NASDAQ: LOVE). Dismissing this small-cap furniture company as just another run-of-the-mill furniture stock would be grievously myopic.

The hallmark that sets Lovesac apart from its furniture peers lies in its product line. Although initially famed for its beanbag-style chairs, approximately 90% of net sales now originate from sactionals – modular couches that can be configured in a multitude of ways to complement various living spaces. Sactionals boast a plethora of high-margin upgrade options and offer over 200 distinctive cover choices. The yarn used in their production is sourced from recycled plastic water bottles. This unique and highly functional product has no equal counterpart.

Nonetheless, exceptional ingenuity comes with a price – and a purpose. While sactionals may be pricier than standard sectional couches, Lovesac deliberately targets a mid-to-high-earning consumer base with its furniture. High-earning consumers are less prone to altering their buying behavior during modest economic contractions or periods of above-average inflation.

Lovesac’s omnichannel sales platform has also played a pivotal role in its outperformance when compared to other furniture companies. Although maintaining a brick-and-mortar presence across 40 U.S. states, Lovesac leans into online sales, pop-up showrooms, and partnerships with major retailers to bolster brand visibility and increase sales. This omnichannel platform has effectively curbed overhead costs while elevating Lovesac’s operating margin.

Similar to PayPal, Lovesac’s stock is historically inexpensive. Presently, shares are available for 11 times forward-year earnings – a modest valuation when considering the potential for the company to expand over the next decade. As such, Lovesac is an enticing prospect in the realm of growth stocks.