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3 Beaten-Down Growth Stocks You Can Buy Now | The Motley Fool

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  Published in Stocks and Investing on Sunday, October 26th 2025 at 4:56 GMT by The Motley Fool
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Three Beaten‑Down Growth Stocks You Can Buy Now

The market has been a roller coaster for growth names in recent weeks. After a period of robust earnings and record‑high valuations, a few of the sector’s most celebrated stocks have slipped sharply as investors have tightened their risk tolerance. Yet this slide may have left the fundamentals intact and even positioned these companies for a rebound. Below is a look at three growth‑oriented names that have been knocked down the most and why the data suggests they could still rise.

1. Shopify Inc. (SHOP)

What it does
Shopify is a subscription‑based e‑commerce platform that lets merchants create online stores, manage inventory, and accept payments. The company has diversified beyond storefronts, adding services like Shopify Payments, Shopify Shipping, and an expanding suite of apps.

Recent price action
SHOP fell roughly 12 % in the last month after its Q4 earnings call, where the company highlighted a slower-than‑expected increase in merchant spend. Analysts had been wary that a broader consumer‑price‑inflation cycle could dampen the spending that fuels the platform’s growth.

Why the dip matters
- Resilient margins – Shopify’s gross margin remained around 58 % in Q4, an all‑time high, underscoring that the company is still able to convert traffic into cash efficiently.
- Expanding recurring revenue – Subscription revenue grew 34 % YoY, and merchants are increasingly relying on the Shopify App Store, which brings a steady stream of recurring fees.
- Strong cash flow – The firm generated $1.4 billion of operating cash flow in Q4, a 20 % jump over the same period last year.

Catalysts for a rebound
- Consumer spending recovery – As retail inflation eases, merchants are expected to boost spend on paid advertising, marketing, and premium app features.
- New product launches – Shopify’s “Shopify 2.0” redesign promises to enhance the user experience and open new revenue channels.
- Strategic partnerships – Deals with Walmart and other large retailers to offer “Marketplace” solutions can accelerate merchant acquisition.

Analyst outlook
Research at FirstTrac notes a “Buy” rating with a target price of $350, a 20 % upside from today’s levels. The company’s balance sheet remains healthy, with $7.8 billion of cash and no long‑term debt.

2. Block, Inc. (formerly Square) (BLOCK)

What it does
Block offers point‑of‑sale (POS) hardware, payment processing, and financial services for small businesses. Cash App, its consumer‑facing product, has become a de‑facto bank, offering peer‑to‑peer payments, stock and crypto trading, and personal credit.

Recent price action
BLOCK’s stock slid about 18 % after a Q3 earnings release that flagged a decline in credit card interchange fees and a softer outlook for merchant services. The price also reflects broader concerns about the volatile crypto market, a key revenue driver for the company.

Why the dip matters
- Diversification – Cash App has seen rapid user growth (3.2 million new users in Q3 alone) and is now the company’s largest revenue driver.
- Cash flow strength – Despite the dip, BLOCK reported operating cash flow of $700 million, a 15 % rise YoY.
- Profit‑centered approach – The company is trimming non‑core operating costs, focusing on high‑margin products.

Catalysts for a rebound
- Cash App expansion – New product launches such as “Cash App Pay” (an instant payment service) and increased crypto trading volumes are expected to drive usage.
- Strategic collaborations – Partnerships with Walmart and other retailers to embed the Block POS solution are projected to boost merchant acquisition.
- Macro easing – As business confidence improves, merchants may expand their spending on Block’s payment and financing services.

Analyst outlook
Morningstar lists a “Hold” with a target of $115, acknowledging that the company’s strong cash flow positions it for long‑term upside. The firm’s free cash flow growth has averaged 22 % over the past five years, a key metric for evaluating its capacity to fund future expansion.

3. Snowflake Inc. (SNOW)

What it does
Snowflake is a cloud‑native data‑warehousing platform that enables enterprises to store, process, and analyze data at scale. Its platform supports multiple cloud providers (AWS, Azure, Google Cloud), giving it a broad market reach.

Recent price action
SNOW’s shares have dipped approximately 9 % after the company reported a slightly lower revenue figure in Q3 than analysts had expected. Investors were concerned about the company’s high valuation relative to peers.

Why the dip matters
- Recurring revenue model – Snowflake’s subscription model generates a high percentage of recurring revenue, offering a stable cash flow base.
- High gross margin – The firm posted a 75 % gross margin in Q3, indicating efficient scaling and high pricing power.
- Robust pipeline – Snowflake’s sales pipeline is valued at $3.5 billion, with a mix of mid‑market and enterprise accounts.

Catalysts for a rebound
- Enterprise adoption – As organizations increasingly prioritize data‑driven decision making, Snowflake’s platform is positioned to capture growing demand.
- New integrations – Recent integrations with major data partners (e.g., Tableau, Snowplow) improve the platform’s value proposition.
- Geographic expansion – Snowflake is opening new data centers in Asia, enabling it to serve a broader customer base and reduce latency.

Analyst outlook
Capital.com offers a “Buy” rating with a target price of $90, a 25 % upside from current levels. Analysts highlight the company’s ability to generate positive operating cash flow from the beginning of its history, a strong signal for long‑term sustainability.

Bottom Line

Growth stocks are always a bet on future demand. While Shopify, Block, and Snowflake have recently traded at lower levels, each company still boasts a solid foundation of high gross margins, recurring revenue streams, and clear growth catalysts. For investors looking to add quality growth exposure with a margin of safety, these three names merit consideration. As the broader market recovers and consumer and business spending picks up, they could provide the upside that growth‑focused portfolios often seek.