Market sell-off: 2 attractive growth stocks to buy now

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Stock market sell-offs are an unfortunate but inevitable part of being an investor. Over the past two decades, the S&P500 dropped by 10% or more on 10 separate occasions. But every past correction in the US market has ended in a new bull market, and there’s no reason to believe this one will be any different. This means that the current situation is actually a buying opportunity for patient investors.

There are several ways to capitalize on this. Putting money into an S&P 500 index fund would be the easiest and lowest risk because it gives you instant diversification. But if you prefer to choose individual stocks, Global-e online (GLBE -6.84%) and Axon Enterprise (AXONE 0.83%) sound like smart buys right now.

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Global-e online

Global-e is on a mission to make commerce borderless. Its platform integrates with a company’s digital storefront to enhance the experience of international buyers. This means localizing language, currency and payment methods on a market-by-market basis, which helps increase international conversion rates and boost cross-border sales. Global-e also works with over 20 shipping carriers to provide fulfillment services to its merchants, and manages the calculation and remittance of import duties and foreign taxes.

By providing these services, Global-e captures an enormous amount of market-specific consumer data, creating a flywheel effect that should drive long-term growth. Specifically, each new piece of information makes its AI models a little better at optimizing conversion rates. This should bring more merchants to the platform over time.

Thanks to this value proposition, this young e-commerce company is growing rapidly. Revenue jumped 65% to $76.3 million in the first quarter, driven by a particularly strong performance in the United States. On a less optimistic note, Global-e is not profitable on a GAAP basis and generated negative free cash flow of $11.6 million in the first quarter. However, the company has $188 million in cash and cash equivalents on its balance sheet and no long-term debt, meaning it can afford to invest aggressively in growth.

On that note, Global-e stands before a huge market opportunity. Cross-border e-commerce spending will total $736 billion in 2023, according to Forrester Research, fueled by the rise of online shopping and direct-to-consumer sales. For context, Global-e has facilitated sales of $1.6 billion over the past year, meaning it has captured about 0.2% of its addressable market.

Currently, Global-e shares are trading at 11.7 times the sell, which is close to its cheapest valuation as a public company. That’s why now looks like a good time to buy.

Axon Enterprise

Axon is best known for its conducted energy devices (CEDs), which are sold under the TASER brand. The company has long been the market leader in CEDs, and TASER sales rose 16% in the first quarter. But revenue from the company’s new software and sensor businesses soared 48%, and those products account for the bulk of its $52 billion addressable market.

Axon’s sensor ecosystem consists primarily of body-mounted cameras and on-board camera systems, both of which transmit video and location data to its cloud-based software. This includes tools for digital evidence management, incident reporting, and real-time situational awareness. These products improve efficiency, safety, and transparency for customers such as law enforcement, firefighters, and emergency medical personnel, as well as commercial businesses.

Financially, Axon was firing on all cylinders in the first quarter. Revenue soared 32% to $256 million and the company posted GAAP earnings of $0.76 per diluted share, compared with a loss of $0.75 per diluted share in the period of the year previous. Even better, the company is well positioned to maintain this momentum.

Axon maintains customer relationships with 17,000 of the 18,000 law enforcement agencies in the United States. This advantage has helped it extend its leadership in CEDs to body cameras and digital evidence management software. Building on this foundation, the company recently added court system software to its portfolio. Its new product, Attorney Premier, enables public defenders and prosecutors to manage digital evidence and share it with police.

Axon’s expansion into justice system software is particularly apt because it creates a flywheel effect with its law enforcement products. As more customers on one side adopt Axon’s digital evidence management software, it becomes increasingly valuable to all customers on the other side. More broadly, Axon’s capacity for innovation should allow it to grow rapidly in the years to come. And with stocks trading at 7.4 times sales – well below their three-year average of 10.6 times sales – now seems like a good time to buy this growth stock.

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