Got $2,000? Here Are 2 Beaten-Down Growth Stocks to Buy Right Now

Beaten-down growth stocks such as Aritzia and UiPath trade at a discount to consensus price target estimates.

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Investing in beaten-down growth stocks is a great strategy to build long-term wealth over time. Generally, growth stocks trade at a premium during bull markets and underperform significantly when sentiment turns bearish. While the equity indices are trading near all-time highs, several quality growth stocks continue to trade at a discount to their all-time highs. Here are two beaten-down growth stocks you can buy right now for $2,000.

Aritzia stock

Valued at $4.2 billion by market cap, Aritzia (TSX:ATZ) stock is down 37% from all-time highs. Aritzia is a design house with the fiscal fourth quarter (Q4) of 2024 (ended in February) sales of $682 million, an increase of 7% year over year. Investors were worried about Aritzia’s decelerating sales as the top line grew by 44% in Q4 of 2023 and by 66% in Q4 of 2022.

Similar to other retail companies, Aritzia has focused on improving the bottom line amid a challenging macro environment and sluggish consumer spending. In Q4, it opened six new boutiques and repositioned three existing boutiques in premier real estate locations. It emphasized that new boutique payback periods are between 12 and 18 months, ahead of management expectations. The company also normalized inventory levels, reducing its inventory by 27% at the end of fiscal 2024.

Additionally, Aritzia executed a smart spending initiative, which resulted in annualized run-rate savings of over $60 million via process optimizations, vendor negotiations, and KPI improvements.

Aritzia is expected to end fiscal 2025 with adjusted earnings of $1.77 per share, up from $0.92 per share in 2024. So, priced at 21.2 times forward earnings, ATZ stock is quite cheap and trades at an 18% discount to consensus price target estimates.

UiPath stock

Valued at $6.6 billion by market cap, UiPath (NYSE:PATH) stock is down 86% from all-time highs, allowing you to buy a growth stock at a steep discount. UiPath stock fell significantly after the sudden resignation of Chief Executive Officer (CEO) Rob Enslin last month.

UiPath operates an enterprise-facing robotics process automation (RPA) platform and reported revenue of US$335 million, an increase of 15% year over year. Its operating expenses stood at US$329 million, which meant it reported a net loss of US$29 million in Q1, narrower than its loss of US$32 million in the year-ago period.

However, UiPath is cash flow positive and reported an adjusted free cash flow of US$101 million in Q1, an increase of 39% year over year. A positive cash flow allows UiPath the flexibility to reinvest in growth projects, target accretive acquisitions, and strengthen its balance sheet.

According to a research report from Gartner, UiPath has a 36% market share in the RPA market, up from 34% in 2022. Moreover, the RPA market is forecast to grow by 37% annually through 2032, providing UiPath with the opportunity to grow its top line at a steady pace going forward.

Priced at 31 times forward earnings, UiPath stock might seem expensive. Analysts expect UiPath to end fiscal 2029 with adjusted earnings of US$2.4 per share. So, if it’s priced at 30 times forward earnings, UiPath stock should touch US$72 per share in the next four years, up from US$11.5 per share today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends UiPath. The Motley Fool has a disclosure policy.

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