After The Sell-Off, Are Growth Stocks Now Values?
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With growth stocks still falling to start 2022, lots of people have been asking Tracey on Twitter if they are now “values”. After all, a stock that is down over 50% must be cheap now, right?
Two Different Ways to Identify Value Stocks
Remember, there are two ways to find “value” stocks.
1. Using classic value fundamentals such as low PEG, P/S, and P/E ratios.
2. Looking at value compared to peers or the industry.
Meta Platforms (FB - Free Report), for example, has a forward P/E of 21 which wouldn’t make it “cheap” using traditional value fundamentals.
But compared to the other FANGMAN stocks, Meta Platforms is a value.
Meta Platforms has the lowest P/E among the FANGMAN stocks. It also is trading near the low end of its historic P/E range.
Meta Platforms might be one growth stock that does have value.
Growth Stocks: Values or Traps?
1. Shopify (SHOP - Free Report)
Shopify was one of the top growth stocks of the last 5 years, with shares rising 1585% during that time.
Who didn’t wish they had gotten in years ago?
But Shopify shares have dropped 45% in the last 6 months, including 35% in 2022 alone.
Is this a buying opportunity in Shopify?
2. PayPal Holdings, Inc. (PYPL - Free Report)
PayPal has been an investor favorite since its 2015 spin-off from eBay. Over the last 5 years, PayPal shares have gained 306%.
But in the last 6 months, PayPal shares have slid 49%, including losing 16.9% year-to-date.
Are PayPal shares cheap enough for value investors to be taking a look?
3. Snowflake (SNOW - Free Report)
Snowflake went public during the pandemic, in 2020.
Two years later, Snowflake still doesn’t have a forward P/E because its earnings are still expected to be negative.
Over the last 6 months, Snowflake shares have fallen just 4.5%, but year-to-date they are down 25.3%.
Is Snowflake a value or a trap?
4. CrowdStrike (CRWD - Free Report)
CrowdStrike has been a popular cybersecurity stock during the pandemic.
Shares of CrowdStrike are up 150% since its 2019 IPO but have fallen 41% in the last 6 months. Year-to-date, they’re down 22.5%.
Has CrowdStrike gotten cheap enough for value investors to take a look?
In full disclosure, Tracey owns shares of FB in her personal portfolio.
Disclaimer: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the more