3 Growth Stocks Wall Street Might Sleep On, But I Can’t

Even the best growth stocks are seeing their shares decline. But just because their price is down doesn’t necessarily mean the stock is down and out of the running. In fact, Amazon lost 90% of its value over a two-year period in the early 2000s, becoming the nearly $2 trillion company it is today.

Let’s look at three consumer goods growth values which are broken but certainly not eliminated.

1. Elven Beauty

Down nearly 30% from its recent peak, Elf Beauty (NYSE: ELF) The company remains one of the biggest growth stories in the consumer goods sector. By leveraging influencers and creating close copies of popular prestige cosmetics, the company has been able to gain shelf space and a significant share in the mass-market cosmetics category. In fact, it has become the #1 cosmetics brand among teens, according to consumer surveys.

While growth may be slowing from the breakneck pace of recent years, elf still has a long way to go to grow. The company has made solid initial inroads by expanding internationally, but it is still only present in a few markets. The company has over-indexed on the Hispanic community in the U.S., so Latin America could be a big opportunity going forward.

Meanwhile, the company has recently branched out into skin care. With just 2% of the U.S. skin care market share, the potential to gain share in this category represents a huge opportunity. Given the company’s performance in cosmetics over the past few years, there’s no reason to believe it won’t have similar success in skin care.

Negotiation at a Price/earnings/growth ratio (PEG ratio) With a PEG below 0.7, this growth stock is very attractive after its recent drop. A PEG below 1x is generally considered attractive, but for a growth stock, it puts it squarely in the bargain category.

2. Nike

After reporting just a 1% increase in constant currency revenue for its 2024 fiscal year, which ended in May, and forecasting a mid-single-digit sales decline in fiscal 2025, it might be better to call Nike (NYSE: NE) a former growth stock. After all, it hasn’t shown much growth lately.

However, after the recent stock drop, investors can buy the iconic brand at one of the cheapest valuations in a long time, with a price-to-earnings ratio below 20.

But let’s not forget Nike. One of the best ways for a management team to get a stock back on track is to give extremely conservative guidance, then sprint out and clear the low bar that’s been set. Nike appears poised to do just that.

The story continues

One reason is that the company is expected to get a boost from the Olympics, as it has spent more than ever before on the event. Nike has also launched a number of new products focused on the event.

Research firm Similarweb, meanwhile, showed that Nike’s strategy was paying off with a huge increase in website visits and strong conversions…