3 stocks poised to rebound in March

Some stocks that may have flown too high, too soon have seen steep declines lately. Shares of Interactive Platoon (NASDAQ: PTON), Focus on video communications (NASDAQ:ZM), and You’re here (NASDAQ: TSLA) were market darlings just a few weeks ago. Sentiment reversed during the recent market correction, and all three are now trading at least 20% below their all-time highs.

It will not always be so. All three have the right ingredients to get back on track. Let’s see why this trio of stocks can hit new highs later this year, hitting the market again in the process.

Image source: Getty Images.

1. Interactive Platoon

The first two names have a lot in common. Peloton and Zoom Video became poster children for the new normal during the early stages of the pandemic, only to be discarded when COVID-19 vaccines started hitting the market. First, let’s take Peloton for a spin.

Peloton has exploded as a premium home fitness platform. Its treadmills have become the worthy substitute for fitness center workouts. His even more popular stationary bikes replaced local spin shops.

The growth has been tremendous. Peloton Connected Fitness subscribers soared 134% to 1.67 million members. Its cheaper digital subscriptions for people who don’t have Peloton gear is a much smaller business, but it’s growing even faster. Peloton now tops $1 billion in revenue every quarter, and it’s not done sweating.

Peloton isn’t going anywhere once the public health crisis passes, largely because it was a pandemic game that rightfully improved on the original it replaced. Peloton’s interactive sessions are hands-on and productive. The proof is in the pudding. Investors may have dumped shares of Peloton; the stock is 31% off the January peak. But workout enthusiasts see things differently. Demand continues to exceed supply even with vaccines on the market. The order book is still several weeks for new orders.

2. Zoom

Tuesday was — well — weird for zoom stock. The video conferencing speedster opened 7% higher after serving a monster quarter, only to lose 15% of its value throughout the trading day to close Tuesday down 9%.

Its fourth fiscal quarter results were outstanding. Revenue soared 369% to $882.5 million. If you think that’s a big number, adjusted operating profit and earnings per share jumped 840% and 713%, respectively.

Growth will definitely slow down at this point. Zoom has released guidance for the new fiscal year 2022, and it sees revenue jump 42% to $3.77 billion, with adjusted earnings up a modest 8% to $3.62 per share. If Zoom’s guidance sounds like a good reason to dump the stock, keep in mind that prior to the report, analysts expected Zoom to earn less than $3 per share in the new fiscal year. . This does not go away after the pandemic. Zoom is now part of our lives, and the stock is a bargain at a 37% discount from its October high.

3.Tesla

Investors are allowed to change their minds – and their wheels. In January, I designated Tesla as a stock to avoid. A month later, I finally owned my first Tesla vehicle and became a shareholder for the first time.

“Tesla is not going to give up its pole position in the rising electric vehicle market,” I argued in late January. “It will continue to make its mark, and the revolution is real. The $837 billion market capitalization is what worries me here.”

Tesla’s market cap had peaked at $864 million two days earlier when its shares briefly topped the $900 mark. The stock is trading down 24% at Tuesday’s close.

Traditional automakers are making big moves towards electric, and there are potential new entrants into this niche worth watching. The problem for them is that they are not Tesla. They lack full self-driving technology where a car can literally drive itself from a freeway ramp to its desired exit. They don’t have the proprietary network of over 20,000 boost stations to eat away with range anxiety.

Tesla became profitable in 2020 and posted an operating margin of 6.3%. It produced and delivered half a million cars. The more fuel-efficient Model 3 and Model Y drove the increase in volume, but earlier this year Tesla updated its premium cars. Some may still not view Tesla as a bargain with its $659 billion market cap, but the momentum is on its side.

Peloton, Zoom, and Tesla are down, but they haven’t come out. All three stocks are expected to rebound in March and beyond.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging 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 wealthier.

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