Black Friday is only a couple of days away, and the stock market offers some stocks at a cheap discount. Here are three stocks to consider buying as they trade far away from their 2021 highs – Roku, Zoom, and SNAP.
Shoppers from all around the world love Black Friday deals as they often offer significant discounts on goods and services. This year, the stock market offers some names trading far away from their yearly highs, thus bringing an opportunity to grab some good quality stocks as their valuation decreased significantly.
Here are some stocks to consider as they trade well off their highs: Roku, Zoom, and SNAP.
Roku is a movies and entertainment company operating a TV streaming platform. Headquartered in San Jose, California, it has over 51 million active accounts, and it was one of the investors’ darling during the COVID-19 pandemic.
The stock price is down more than 50% from its 2020 highs, and at these levels the valuation does not look so stretched anymore. Sure enough, the company operates with a gross profit margin of 52.35%, and it has a strong free cash flow position, forecast to increase five times in the next four years. Much higher revenues are expected, too, thus bringing an opportunity to investors with a medium and long-term horizon.
From a technical analysis perspective, Roku made a double top pattern in the first half of the year, and then broke below the pattern’s neckline. Investors willing to take the risk here, may want to add to the position once the price gets back above the neckline.
Zoom Video Communications
Zoom Video Communications or simply Zoom is another company that outperformed the market during the COVID-19 pandemic. As the workplace changes, Zoom products and services will likely stay in great demand; thus the -55% decline in the stock price offers an opportunity for investors having a medium to long-term horizon for their investments. If we add that revenues are expected to quadruple and reach $8.2 billion by 2026, then the current Black Friday discount may look appealing.
SNAP is down -38% from the highs and the discount looks more than attractive. After all, this is one company with potential if we are to interpret the fact that out of 96 analysts covering the stock price, 78 have a buy rating, with the highest price target being $110.