To The Moon

Both these stocks are trading over 60% below their 52-week highs, suggesting bargain pricing for retail investors.

It was never easy, but it seems to be getting so much harder to gauge the general direction of the U.S. market lately. That has some investors just staying away from the market these days. A neutral sentiment suggests investors do not expect broader market prices to change much in the next six months.

But for those with a bullish outlook, there are some growth stocks in the market with solid fundamentals and discounted valuations that have bargain pricing at the moment. These stocks are riding several secular tailwinds and are poised for a solid growth trajectory in the coming months. Two such stocks are Coupang (CPNG) and SoFi Technologies (SOFI). Here's why they could be attractive long-term picks for long-term investors.

Image source: Getty Images.

1. Coupang

Share prices of South Koreane-commercegiant Coupang are down about 37% since the start of the year. The stock cratered in early March on overall market weaknessas well as rumors about a potential float of 50 million additional shares. Investors are also concerned about the company's increasing losses.

But other data and news suggest this pullback is too exaggerated. Furthermore, the company's losses in 2021 mainly stemmed from COVID-19-related costs and rising investments in several growth initiatives, both of which are not structural challenges for Coupang. 

In 2021, Coupang accounted for 15.7% of the South Korean e-commerce market, estimated to be worth $196 billion. Being a dominant player, the company is well-positioned to benefit from the rising penetration of e-commerce as well as increasing revenue per user in the South Korean population.

According to the survey from the Korea Consumer Agency, Coupang was selected as the most preferred online shopping platform for its accuracy and speedy delivery. Thanks to its robust logistics infrastructure spread across 30 cities, 70% of the South Korean population now lives within 7 miles of a company fulfillment center.

Coupang's operational performance in the recent quarter further highlights the popularity of this shopping platform among Korean consumers. In the fourth quarter (ending Dec. 31, 2021), the company reported an impressive 21% year-over-year jump in active customer count to 18 million, while net revenue per active customer grew year over year by 11% to $283. With 37 million total Korean online consumers, the company is in a position to double its active customers in the coming years.

Rocket WOW, the company's subscription-based delivery service which includes free shipping, dawn delivery, same-day delivery, and free unlimited returns for 30 days, is also helping develop a loyal customer base. At the end of 2021, there were 9 million Rocket WOW customers. In addition to first-party sales, Coupang's extensive logistics network and a broad customer base have also attracted over 200,000 third-party sellers on the platform, which has added significantly to the company's top line.

Analysts are projecting Coupang's revenue to grow year over year by 25.8% in fiscal 2022 and 24.1% in fiscal 2023.

CPNG PS Ratio data by YCharts

Yet, the company is trading at a price-to-sales ratio of only 1.5, far lower than its historical valuation levels. Hence, Coupang appears a solid buy in April 2022.

2. SoFi Technologies

Fintech player SoFi Technologies' stock has had a very unimpressive start to 2022. The company's share prices are down 44.7% so far this year, as investors have preferred to pull out of unprofitable stocks in the face of rising inflation and likely multiple hikes in interest rates. Additionally, with the lending business accounting for around $764 million of the $1 billion in adjusted revenue in fiscal 2021 (ending Dec. 31, 2021), an extension of the federal student loan moratorium to the end of August could prove to be very challenging for the company.

Yet, there are many positives that support a bullish hypothesis for this disruptive fintech player. The company has successfully positioned itself as a one-stop-shop for the consumer's digital finance needs. SoFi provides almost all of the services available at a traditional bank -- be it student and private loans, money transfers, savings, banking, or investing -- all on a single app. The success of the app is apparent considering that the company added 523,000 new members in the fourth quarter, bringing the total customer count to 3.5 million at the end of 2021. The company had 5.2 million products at the end of 2021, a year-over-year jump of 105%.

With SoFi receiving conditional regulatory approval to become a national bank (through the acquisition of Golden Pacific Bancorp), the customer count may further grow at an accelerated pace. The bank charter will reduce the company's cost of funding loan originations, while also enabling it to hold loans on its balance sheet for added interest income. This could further boost the company's margins in the coming years.

SoFi has also been focused on several acquisitions to further expand its business. The acquisition of payment software company Galileo in 2020 has provided meaningful diversification to its business by positioning it as a third-party infrastructure technology provider for institutional clients. The recent acquisition of banking software maker Technisys is further expected to enable the company to roll out personalized financial services for its customers and help build financial infrastructure for its institutional clients.

SOFI PS Ratio data by YCharts

SoFi is currently trading at a price-to-sales ratio of 7.2, close to the lowest levels it has reached since going public in June 2021. This, coupled with several growth drivers and improving financials, makes SoFi an attractive pick in April 2022.

Source: The Motley Fool

$SoFi Technologies Inc.(SOFI)$