Market sell-offs can be unsettling, but for seasoned investors, they often present golden opportunities to scoop up high-growth stocks at discounted prices. The Nasdaq Composite recently slipped into correction territory, falling more than 10% from recent highs. However, for long-term investors, market corrections offer the chance to buy promising stocks at lower valuations, setting the stage for significant gains in the years ahead.
Here are two growth stocks that offer solid fundamentals, strong business models, and the potential for explosive returns over the next decade.
1. Coupang: The Amazon of South Korea with Global Aspirations
Amazon dominates global e-commerce, but it doesn’t own the entire $4 trillion industry. Coupang (NYSE: CPNG) has built a stronghold in South Korea by focusing on densely populated cities and implementing an efficient logistics network. With its commitment to disciplined investments and long-term shareholder value, Coupang is a compelling stock for growth investors.
Expanding Revenue Streams with High-Margin Services
Coupang has adopted a strategy similar to Amazon’s, expanding beyond e-commerce to offer a suite of complementary services:
- Coupang Eats (food delivery)
- Coupang Play (digital entertainment)
- Coupang Pay (payment services)
These services, referred to as “developing offerings,” have seen 124% year-over-year revenue growth (excluding the recent acquisition of Farfetch). This impressive growth is driven by a loyal customer base that engages with Coupang’s expanding ecosystem of services.
Explosive Growth in Gross Profit and Margin Expansion
Coupang’s gross profit soared 43% year over year in 2024, outpacing its 24% revenue growth. Management anticipates continued margin expansion in 2025, driven by:
- Increased operational efficiency
- Greater use of automation
- Growth in high-margin service offerings
These factors suggest that Coupang is not just growing revenue but also significantly improving profitability—an attractive combination for long-term investors.
Aggressive Global Expansion
While Coupang dominates the South Korean e-commerce market, it has also started expanding internationally. Notable developments include:
- Taiwan: Fourth-quarter revenue grew 23% quarter over quarter. Coupang recently launched its WOW membership program, offering free shipping and exclusive perks, similar to Amazon Prime.
- Japan: Coupang launched Coupang Eats, marking its entry into the food delivery market in one of the world’s largest economies.
By leveraging its efficient logistics and customer-centric approach, Coupang is positioning itself for success beyond its home market.
Attractive Valuation for a High-Growth Business
Despite its impressive growth, Coupang trades at a price-to-sales ratio of just 1.39, making it an attractive investment. Shares are currently 15% below recent highs, presenting a great entry point for investors looking to capitalize on the company’s rapid expansion and improving margins.
2. PDD Holdings: The Rising Challenger to Alibaba and Amazon
PDD Holdings (NASDAQ: PDD) has emerged as a formidable competitor to Alibaba in China and is now making waves in global e-commerce through its Temu platform. With a business model focused on mobile-first shopping and direct-to-consumer sales, PDD Holdings is disrupting the traditional e-commerce landscape.
Unique Business Model Driving Growth
PDD Holdings stands out in the e-commerce industry for several reasons:
- Mobile-First Platform: Recognizing early on that consumers were shifting from desktop to mobile, PDD built its platform for a seamless mobile shopping experience.
- Consumer-to-Manufacturer Model: By cutting out middlemen, PDD provides customers with deep discounts while ensuring merchants achieve high sales volumes.
This strategy has driven massive growth—revenue has tripled over the last three years, and there is still significant runway for expansion.
Stronghold in Agricultural E-Commerce
PDD Holdings originally focused on agricultural products, enabling farmers and small businesses to sell directly to consumers. This has created a positive growth cycle where increased sales lead to greater investment in product quality and logistics, driving even more customer adoption.
Gamification and Social Shopping Revolution
Unlike traditional e-commerce platforms, PDD incorporates social engagement and gamification into the shopping experience:
- Customers can share products with friends on social media.
- Group shopping allows users to unlock special discounts.
This unique strategy fosters high customer engagement and encourages repeat purchases, setting PDD apart from competitors like Alibaba.
Exceptional Profitability and Low Valuation
PDD’s financial performance has been nothing short of stellar:
- Profit margin has doubled to nearly 30% over the past three years.
- Earnings per share (EPS) are expected to grow at an annualized rate of 21%.
- Despite its growth, shares trade 39% below their previous peak.
Currently, PDD trades at just 12 times earnings, making it an incredibly attractive investment relative to its growth potential.
Final Thoughts
Market dips create opportunities for investors to buy high-quality stocks at discounted prices. Coupang and PDD Holdings are two companies with strong fundamentals, expanding global reach, and innovative business models that position them for substantial long-term growth.
For investors looking to capitalize on the next decade’s e-commerce boom, these two stocks could be among the best opportunities available today.
