While most Nasdaq stocks continue to trade near all-time high levels, some of the names have dipped in recent days due to a general market pullback, potentially making them good buys at their current levels.
In fact, some Nasdaq stocks failed to keep up with the overall market rally of the past year in the first place, making the recent dip in stock prices an extra-attractive opportunity. Thus, I believe today presents a unique chance for investors to acquire quality stocks at a discount.
There are three names in particular that, at their current levels, seem to offer compelling opportunities. These stocks have substantial upside potential and provide a notable margin of safety at today’s prices, making them ideal choices for those looking to capitalize on the recent market dip. Let’s take a closer look
Booking Holdings (BKNG)
Booking Holdings (NASDAQ:BKNG) dipped from its 52-week high of $4,144, which, in my view, presents an attractive opportunity for investors at its current levels. As one of the leading global online travel and reservation service providers, Booking naturally thrives during the industry’s ongoing surge, which has been the case in recent quarters.
Last year, Booking’s revenues increased by 25%, reaching a record $21.4 billion. This momentum appears to have seamlessly carried over into 2024, with Booking posting revenue growth of 17% in the first quarter, reaching $4.4 billion, on the back of excellent industry conditions. This marked a record first quarter in terms of revenues as well.
In the meantime, the company’s high-margin business model makes its profitability quite scalable. Hence, the robust revenue growth I noted propelled adjusted net income to soar by 39% in 2023, reaching $5.6 billion and by 61% in the first quarter of this year, amounting to $707 million.
With expectations for continued rapid growth in both the top and bottom lines for the rest of the year, and given the recent dip pushing the stock’s price-to-earnings ratio to just 21.5x, I find Booking stock attractively priced.
CoStar Group (CSGP)
CoStar Group (NASDAQ:CSGP) has seen a notable drawdown of about 25% from its 52-week high, with shares recently recording a sharp dip. Despite this, CoStar continues to grow at a double-digit pace, a trend backed by several growth drivers.
For instance, the company’s expansion into international markets, such as its recent entry into the U.K. commercial real estate sector, opens new revenue streams. Additionally, real estate professionals seek its robust data analytics services to make data-driven decisions, which should power organic growth.
The recent announced plan to purchase Matterport (NASDAQ:MTTR), a leader in 3D spatial data, is poised to take CoStar’s offerings to the next level as well. It will integrate advanced visualization technology into CoStar’s platform, further cementing the company’s market-leading position and driving subscription growth.
Given these positive growth prospects and the recent price dip, I believe that CoStar stock is now attractively valued. True, it’s forward P/E of 119x and 2025 P/E of 64x are steep, but given the explosive earnings growth the company is expected to see in the coming years, these multiples can be comfortably justified, in my view.
Monster Beverage (MNST)
Monster Beverage (NASDAQ:MNST) is now trading about 18% below its 52-week high, which I think presents a very interesting opportunity, given that its overall growth shows no signs of slowing down. Despite the recent sell-off, partly due to increased competition in the energy drinks market from companies like Celsius Holdings (NASDAQ:CELH), the company holds a strong position in the space. Its extensive portfolio and strong brand loyalty continue to fuel its growth.
The company has posted double-digit growth in recent quarters, a trend that is set to continue. Besides its core brand reaching a rising number of consumers year after year, the company’s growth strategy includes various other routes. For example, Monster’s recent entry into the water space has already started to contribute to its results, with Monster Tour Water’s revenues growing by 10.7% in its most recent quarter.
With the stock currently trading at a forward P/E of 29x and consensus estimates forecasting sustained growth in the mid-teens well into the future, I believe Monster offers a compelling buying opportunity. This is especially true when one considers the company’s many qualities, including having no debt on its balance sheet.
On the date of publication, Nikolaos Sismanis held a long position in MNST. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
