While the recent market volatility has been disappointing, this pullback is nothing compared to what some ASX growth stocks have experience over the last 12 months.
For example, the three growth stocks listed below are down between 40% and 65% during this time.
Here's why this could prove to be a great opportunity for investors to buy and hold these stocks:
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Domino's Pizza Enterprises Ltd (ASX: DMP)
The Domino's share price has lost almost 50% of its value since this time last year. Investors have been selling the pizza chain operator's shares due to inflationary pressures. As well as weighing on its costs, the cost of living crisis has led to consumers pushing back on price increases, impacting sales.
The good news is that inflation will ease in time and our love of pizza is unlikely to ever change. It is for this reason that Morgans is recommending its shares with an add rating and $70.00 price target.
Megaport Ltd (ASX: MP1)
The Megaport share price has lost approximately two-thirds of its value over the last 12 months. This has been caused partly by the market's aversion to loss-making growth stocks and its slowing growth.
Goldman Sachs sees this as a buying opportunity for long term investors. This is due to the broker remaining "confident MP1 has a clear product advantage vs. peers and a decade-long runway for robust growth." Its analysts recently put a buy rating and $8.20 price target on Megaport's shares.
Temple & Webster Group Ltd (ASX: TPW)
The Temple & Webster share price may be rising today but it remains down 41% since this time in 2022. The rerating of growth stock valuations, softening online sales, and fears over housing market weakness appear to be behind this.
But once again, these are all temporary headwinds that will ease in time and could have created a buying opportunity for buy and hold investors. Goldman Sachs clearly thinks it has. Especially given that its analysts "forecast a 21% 10-yr EBITDA CAGR driven by consolidation of market share and growing online penetration."
The broker has a conviction buy rating and $6.50 price target on this ASX growth stock.
