2022 was admittedly a tough year for growth stocks, with the technology-heavy NASDAQ Composite Index losing a third of its value.
Investors lost their appetite for this category of stocks as interest rates surged amid an environment of high inflation.
This year, however, has seen improved sentiment thus far.
The NASDAQ Composite Index has surged by 16.2% year to date, lifting the valuation and share prices of a wide swath of growth stocks.
What’s more, some businesses have also witnessed a strong turnaround as they adjust to difficult conditions.
We feature four US growth stocks that have more than doubled from their 52-week lows, and also take a look at whether their run can continue.
Shopify (NYSE: SHOP)
Shopify is an e-commerce company that provides the tools, platform and infrastructure for business owners to start, market, and run their retail businesses.
The company’s platform powers businesses in more than 175 countries and counts blue-chip brands such as Mattel (NASDAQ: MAT) and Kraft Heinz (NASDAQ: KHC) as its clients.
Shopify’s shares have surged around 126% from their 52-week low of US$23.63 to close at US$53.39.
The company had just released its fourth quarter and full year 2022 earnings.
For 2022, revenue increased by 21% year on year to US$5.6 billion, with its two core divisions, subscription solutions and merchant solutions, enjoying year on year growth of 11% and 26%, respectively.
Gross merchandise value on its platform climbed 12% year on year to US$197.2 billion, with gross payment value surging from US$85.8 billion in 2021 to US$106.1 billion last year.
However, adjusted operating profit came in at US$6.1 million after accounting for increased headcount and the implementation of Shopify’s new compensation system, a far cry from the US$718 million booked in 2021.
There’s a reason for investors to cheer, though.
Shopify has announced increases to all three of its plans for new merchants effective 24 January 2023 and will see charges rising by around 33% from US$29 to US$39 for its Basic Plan to US$399 (from US$299) for its Advanced Plan.
Elsewhere, the company has also introduced Commerce Components by Shopify (CCS), a modern, composable stack for enterprise retail that is marketed to large organisations.
Tesla (NASDAQ: TSLA)
Tesla is a US car manufacturing cum energy company best known for its electric cars.
The business also produces solar panels and lithium-ion battery energy storage solutions.
Tesla’s share price has more than doubled from its year-low of US$101.81 to trade at US$214.24 recently.
2022 turned out to be another record-breaking year for Tesla with total revenue surging by 51% year on year to US$81.5 billion.
Operating profit more than doubled year on year to US$13.7 billion while net profit soared 128% year on year to US$12.6 billion.
Tesla delivered 1.31 million vehicles last year, 40% more than a year ago, with vehicle production jumping 47% year on year to 1.37 million vehicles.
Netflix (NASDAQ: NFLX)
Netflix is a streaming television and entertainment services company delivering a variety of movies and TV shows to over 190 countries.
The company’s share price has rebounded strongly to US$361.42, more than 122% off its 52-week low of US$162.71.
Netflix saw its membership base continue expanding after it suffered two consecutive quarters of decline in 2022.
For the fourth quarter of 2022 (4Q 2022), membership grew by 4% year on year to 230.75 million.
For 2022, the streaming company’s revenue inched up 6.5% year on year to US$31.6 billion.
However, operating profit dipped by 9.1% year on year to US$5.6 billion while net profit slumped by 12.2% year on year to US$4.5 billion.
Despite the weak results, Netflix generated a positive free cash flow of US$1.6 billion for 2022, reversing the negative free cash flow of US$132 million in the prior year.
Meta Platforms (NASDAQ: META)
Meta Platforms is a social media company that owns brands such as the social media site Facebook, the chat program WhatsApp, and photo and video-sharing Instagram.
Meta’s share price has more than doubled from its 52-week low of US$88.09 to close at US$177.16.
The social media company saw revenue slip by 1% year on year to US$116.6 billion in 2022.
Operating profit, however, fell by 38% year on year to US$28.9 billion due to increased costs.
Net profit plunged 41% year on year to US$23.2 billion.
On the bright side, daily active users inched up 3.7% year on year to hit the two billion mark for 4Q 2022.
Monthly active users also increased by 1.8% year on year to 2.96 billion.
CEO Mark Zuckerberg has termed 2023 the “Year of Efficiency” as he announced a broad-based layoff of 13% of the company’s staff.
Meta will also reduce spending as it taps into more efficient data centres while eliminating projects that do not yield desired results.
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Disclosure: Royston Yang owns shares of Meta Platforms.
