Two beaten down stocks with 10X potential

We hope you had a wonderful Christmas weekend! With the markets closed today, let's prepare for the week ahead by taking a look at two companies that are really cheap right now.

Growth stocks have generally taken the worst beatings in the 2022 market downturn, even companies that have great long-term outlooks.

Here are two stocks in particular that could have home-run potential for patient investors who buy at these levels:

An online bank with lofty ambitions

The concept of an online bank has been around for a few decades now, but SoFi (SOFI) is doing things a little differently. Instead of offering an attractive niche product (like a high-yield savings account), SoFi's goal is to offer everything its customers need, and get them to abandon their current banks altogether. As if that wasn't ambitious enough, SoFi also owns the Galileo fintech infrastructure platform, and has said it wants to evolve into the “AWS (Amazon Web Services) of finance.”

Recent results certainly have been impressive. SoFi has grown its membership base by 450% over the past three years to over 4.7 million and has done a great job of increasing adoption of its checking, savings, and credit card products. This should help create a natural marketing funnel for its high-profit lending products. Galileo has grown by leaps and bounds as well, with 124 million customer accounts on its platform, 40% more than it had just a year ago.

SoFi's ramp-up in consumer banking is even more impressive when you consider that the company has had a banking charter for less than a year. With shares trading for just 82% of book value and tremendous growth momentum, SoFi could potentially grow to 10 times its current $4 billion market cap over time.

A different kind of social network with lots of untapped potential

Pinterest‘s (PINS) stock price is about 75% below its 2021 high, and to be fair, there have been some legitimate concerns. For one thing, Pinterest's revenue mainly comes from advertising, and the ad industry is experiencing a slowdown due to the economic uncertainty. Plus, Pinterest's user base actually contracted for a few quarters as the world began to normalize from pandemic-era restrictions.

However, Pinterest is a unique social network that has tons of room to grow. For starters, the recent results look strong. Pinterest's user base grew significantly in the third quarter, and despite the general slowdown in the advertising industry, Pinterest's average revenue per user is up 11% year over year.

That said, monetization remains a big opportunity. Pinterest's international user base (which makes up the majority of its users) is still in the very early stages of monetizing. In fact, the average Pinterest user outside of North America and Europe generated just $0.11 for the company in the third quarter, compared with $6.13 for the average U.S. user.

On a similar note, Pinterest is a natural portal for e-commerce. After all, people generally go to Pinterest to find things they may want to buy. Pinterest recently hired a new CEO with vast experience in monetizing e-commerce and plans to go all-in on integrating e-commerce functionality into its platform.

If it can successfully figure out where it fits in the e-commerce landscape and how to make money from it, Pinterest could certainly be a home run. After all, Pinterest could 10x from its current level and still have half of leading social media company Meta Platforms‘ (META) market cap.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Matthew Frankel, CFP® has positions in, Pinterest, and SoFi Technologies. The Motley Fool has positions in and recommends, Meta Platforms, and Pinterest. The Motley Fool has a disclosure policy.