3 Beaten Down Stocks To Buy Now

In the months that have followed since the onset of the coronavirus, countless publicly traded companies on the New York Stock Exchange have taken major hits. Whether it be because of the way the companies responded, the uncertainty of the respective industries that the companies reside in, or simply because of the general volatility that has existed on the market as of late, there’s no shortage of companies that have taken a beating.

Conversely, there are also plenty of companies that saw great success in the months that followed the spread of COVID-19, only for those companies to later take a turn for the worst. This is often caused by a company receiving plenty of hype, only for that hype (and the price per share) to die down with time.

No matter what the reason may be, crushed stocks can offer huge upside potential. The challenge is identifying them when at their lows because news media hype will have fizzled by the time they fall so far. Here are three of the best beaten down stocks to buy now.

Zoom Fell 50% From Peak Levels, Now What?

When numerous other stocks were taking a nosedive in the weeks that followed COVID-19’s global spread in March of 2020, Zoom (ZM) took a journey straight up to the company’s record high.

Between March and October, Zoom rose from just over $100 a share all the way up to nearly $560 a share. From there, Zoom stock has been on a steady decline — the company’s stock currently sits at under $260 a share, a 50%+ plummet.

Taking a look at Zoom’s latest quarterly earnings report, this dip is surprising (and shows all the makings of a dramatic turnaround down the line).

For the second quarter of the 2020 fiscal year, Zoom’s total revenue hit $1.02 billion, a growth of 54% year-over-year.

This was Zoom’s first quarter where quarterly earnings exceeded the billion-dollar mark, and it arrived just five quarters after Zoom reached a billion-dollar annual run rate.

What’s more, 74% of this incremental revenue came from new customers, while existing customers made up the other 26%. Judging by these numbers alone, Zoom still has a lot of growth left in it.

The company’s price per share might be down as of late, but the truth is that Zoom is here to stay.

For starters, its video communication capabilities are unmatched, with much higher quality and performance than the competition.

Not to mention, Zoom has been trying to make strategic investments and acquisitions, such as the company’s attempt to purchase of Contact Center as a Service (CCaaS) vendor Five9. Whether that succeeds or not, the signs are clear where Zoom is headed. In the words of Cathie Wood, Zoom is the future of work.

Zoom has all the makings of a beaten down company set for a bullish turnaround. In fact, analysts predict Zoom could rise as high as $460 a share over the next year.

JFrog Analysts Forecast Significant Upside

Just over ten years ago, JFrog (FROG) leaped onto the scene as the world’s first universal artifact management platform, promptly launching a new era in the field of DevOps.

JFrog allows developers to update their software continuously, without having to take intrusive measures and without letting users know that the software is even being updated in the first place.

After going public in September of 2020, JFrog’s stock has been on the decline almost the entire time. This might not last for long, though.

To begin with, JFrog’s revenue climbed to $48.7 million in the second quarter of 2021 — a 34% increase year-over-year.

What’s more, the company expects to surpass $50 million in revenue for the third quarter. JFrog’s most recent acquisition, security platform creator Vdoo, is expected to factor into this continued growth.

Combining security and DevOps into one platform very well could be the thing that sends JFrog stock upward again.

While its price per share currently sits around $31 a share — down from a high of $85 a share in October of 2020 — it’s clear that JFrog’s commitment to future growth and its determination to innovate its existing software so that customers can do the same for their own has the potential to send the company’s price per share up exponentially.

Analysts predict JFrog has the potential to rise as high as $68 a share over the next 12 months.

Nautilus Onboards 380,000 New Customers: A Record

Unlike Zoom and JFrog, Nautilus is a company that has been around far longer than just the past decade or so. In fact, Nautilus (NLS) has been a publicly traded stock since 1999.

Since then, its price per share has been all over the place — rising as high as the low $40s and dropping as low as under $1 over the past couple of decades.

Thanks to some record company bests for the company during the first quarter of 2021, it’s possible Nautilus might approach those highs soon enough.

During the first quarter of the 2021 fiscal year, Nautilus’s net revenue increased 62% to $185 million — by far its highest June quarter and the fourth highest of any quarter in Nautilus’s 35-year history.

Additionally, Nautilus’s retail segment generated $120 million for the quarter, its highest-ever quarterly sales. This has a lot to do with the fact that Nautilus has brought in over 380,000 new customers in the last 15 months, whereas pre-pandemic the company only brought in an average of 100,000 a year.

While Nautilus’s price per share currently sits at just over $9 a share, there’s no reason why the company shouldn’t see some sort of impressive turnaround in the quarters to come — especially when Nautilus just reached more than $30 per share back in February of 2021.

Analysts see Nautilus rising as high as $27 per share by this time next year.

The Bottom Line: Which Beaten Down Stocks to Buy?

The uncertainty of the past few years has brought on all kinds of trouble for even the strongest contenders on the New York Stock Exchange.

On the flip side, though, plenty of other companies have seen immense growth as a result of COVID-19. What hasn’t gotten nearly as much attention are the companies who have the strength to do both: To take a tumble, and then recover from it. Zoom (ZM), JFrog (FROG), and Nautilus (NLS) all show the potential to do exactly this. 

From Zoom’s continued growth and its investments into its own future to JFrog’s evolution as a DevOps titan to Nautilus’s record customer growth as of late, these three companies have undoubtedly been beaten down over quarters past but are committed to turning the tables around sooner rather than later.

Investors might be wise to snatch up shares in Zoom, JFrog, and Nautilus in hopes of each company’s forecast coming true over the next 12 months. The trio might look beaten down at present, but if Zoom, JFrog, and Nautilus continue to perform well, then none of these three are down for the count just yet.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.