Are These The Best Growth Stocks To Buy For 2022?
Growth stocks, as the name suggests, typically refer to companies growing their revenues at above-average rates. Many of these companies may not be profitable yet, but post significant revenue growth. Those who invested early in companies such as Alphabet (NASDAQ: GOOGL) or Amazon (NASDAQ: AMZN) and held their shares until today must be glad they did so. Even at current prices, both companies are still looking attractive to some. Of course, getting in on the ground floor would have been even better.
But that’s easier said than done. Especially when many of the smaller-cap growth stocks are in serious pain right now. As a result, our focus today will be on high-quality businesses that have seen significant declines in their share prices. Perhaps you are looking to do some year-end shopping for value deals. If so, do you have these growth stocks in your cart in the stock market today?
Top Growth Stocks For Your 2022 Watchlist
- Upstart Holdings Inc. (NASDAQ: UPST)
- Sea Limited (NYSE: SE)
- Affirm Holdings Inc. (NASDAQ: AFRM)
- Semrush Holdings Inc. (NYSE: SEMR)
- Cloudflare Inc. (NYSE: NET)
Upstart
Upstart is one of the biggest growth stories in the stock market this year. The company uses artificial intelligence (AI) to evaluate a borrower’s credit risk. To highlight, Upstart-powered banks and credit unions can have higher approval rates and lower loss rates, while simultaneously delivering an exceptional digital-first lending experience. Considering its monster revenue growth and massive addressable market, some investors see the recent bearishness of UPST stock as a good buying opportunity.
Earlier this month, Upstart formed a partnership with the National Bankers Association to improve access to affordable credit for customers of minority-owned depository institutions through a unique agreement to use the company’s AI lending platform. The company also says that access to advanced and innovative technologies will not only help its member banks meet community needs but also compete more effectively as all banking becomes increasingly digital. Given all of this, would UPST stock make your list of best growth stocks to buy right now?
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Sea
Sea is another high quality growth stock to have on your watchlist. Despite being a $120 billion company, it still grew its revenue by 121.8% in its third quarter. That’s thanks to its three core businesses across digital entertainment, e-commerce, and digital payments/financial services. While the gaming segment and its fintech arm have massive opportunities ahead of them, the company is more focused on its e-commerce unit, Shopee.
In Southeast Asia and Taiwan respectively, Shopee continued to rank first in the Shopping category by average monthly active users and total time spent in-app for the third quarter of 2021. The company has also announced its expansion into a few European countries and India, making its intentions of becoming a global e-commerce platform clear. Considering that e-commerce sales have risen significantly during this pandemic, the company’s focus here could pay off really well over the coming few years. For these reasons, will you include SE stock on your watchlist today?
Affirm
Next up, we have Affirm, a leading buy now, pay later (BNPL) company. By leveraging its tech-driven payment networks and partnerships with originating banks, consumers can pay for a purchase over time. As it continues to expand its merchant network, the company is poised to increase its revenues, customers and transaction volumes. And if Affirm can really disrupt the traditional credit card companies, we would be looking at a huge growth runway ahead.
The company’s partnership with Amazon and the e-commerce giant’s recent decision to ban Visa (NYSE: V) payments in the U.K. could be signs of greater things to come. Of course, the rise of BNPL would not render credit cards obsolete. But I would not discard the possibility that this new payment method would carve out a significant market share. Unless the credit card providers and their issuing banks reduce their fees and interest rates, BNPL could continue to gain favor among consumers. Analysts are also expecting Affirm’s revenue to rise more than 40% next year. Should that be the case, would AFRM stock be a buy?
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Semrush
Semrush is a leading online visibility management Software-as-a-Service (SaaS) platform. Starting in 2008 as a single-point solution for search engine marketing, the company has since expanded into a wide array of marketing services. For those uninitiated, the company enables over 79.000 customers globally, with Tesla (NASDAQ: TSLA) as one of its clients. The company also announced an integration with monday.com (NASDAQ: MNDY), a leading cloud-based work operating system. Through this integration, customers can have real-time keyword insights powered by Semrush, without leaving the monday.com interface.
From its most recent quarter, Semrush’s revenue came in 53% higher year-over-year to $49 million. And the company expects the momentum to continue even in the current quarter. While 40% of its revenue goes toward sales and marketing expenses, its dominance in the space has allowed Semrush to be roughly breakeven in terms of profitability. With its wide-ranging product offering and the recent pullback along with the broader market, would now be a good time to scoop up SEMR stock at a discount?
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Cloudflare
Last but not least, Cloudflare is a web infrastructure and website security solutions provider. The company primarily offers content delivery network and DDoS mitigation services. In essence, the company acts as a mediator between website visitors and businesses. Notably, the importance of Cloudflare’s services as client interactions in the digital space increase should not be overlooked. Many are also speculating that the company has the potential to be the next Amazon (NASDAQ: AMZN) Web Services. As the company continues to develop to eventually become an alternative to major cloud platforms, it’s tempting to buy NET stock now that it has corrected by around 40% since its all-time high in November.
From its third fiscal quarter, the company posted a total revenue of $172.3 million. This marks a solid year-over-year surge of 51%. Throughout the quarter, Cloudflare also saw strong large customer growth. In detail, it added a record 170 large customers to its client list during the quarter, a 71% year-over-year increase. The likes of which are essentially contributing upwards of $100,000 in annualized sales each. Given Cloudflare’s strong fundamentals, will you consider adding NET stock to your portfolio?
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