Growth stocks have been getting cheap as the market corrects over the past few years due to tariff and macro fears. Many growth stocks are still very expensive and, arguably, significantly overvalued compared to fundamentals.
That said, it doesn’t mean that you should stay away from growth stocks and retreat entirely to defensive bets. Many growth stocks have declined significantly and are now trading at big discounts. Buying up these dips is a good idea for the long run as there’s a high likelihood of these stocks rebounding rapidly in the coming years or even later this year if the broader market cooperates and macros hold up.
Kaspi.kz (NASDAQ:KSPI) is a Kazakh super-app company that is quite under-covered, but I think it is one of the best investments you can make. The company is solidly profitable and solidly, growing, and it has a great dividend yield. The company also operates in an emerging economy with a growing population.
It comes with a dividend yield of 7.59% and trades at a price-earnings ratio of 9.5 times. In Q4, the company’s revenue grew 30.39%, and net income grew 27.68%. Its net profit margin did compress and cause a miss, but it is still solid at 41.91%. It’s hard to find a company with similar growth and execution that also pays dividends and trades at such a cheap multiple.
Kaspi had an operating margin of 56.29% for all of 2024, which is better than 99.2% of companies in the software industries, and it also has $4.1 billion in cash vs $430 million in debt. The growth has been stellar so far.
The consensus price target of $150.7 implies 56.52% upside potential.
Unlike Kaspi, Methode Electronics (NYSE:MEI) hasn’t had a stellar financial performance. Quite the opposite, as MEI stock is down 42.1% year-to-date as revenue falls and the company reports net losses.
This is a semiconductor company that supplies custom-engineered chips for the automotive and industrial sectors. The company also saw declining demand from the EV and e-bike markets along with a roll-off of certain EV lighting programs.
Moreover, a class action lawsuit filed against Methode alleges that the company provided misleading financial projections between December 2, 2021, and March 6, 2024. Specifically, it claims Methode overstated its ability to meet 2023 diluted earnings per share guidance and a projected 6% organic sales CAGR over three years. These projections lacked a reasonable basis.
However, the current stock market price prices in most of the bearishness here. The stock is near historical floor prices and is at a cyclical low from which it could recover significantly and deliver triple-digit gains as orders eventually pick up in the coming years.
Analysts expect the company to become solidly profitable in FY2026 (starting after April this year). You’re paying just 11.6 times forward 2026 earnings and 6.5 times 2027 expected earnings. Revenue is also expected to return to growth in FY2026, and you’re only paying a fifth of sales for the stock.
What really makes this a good deal for me is the fact that MEI comes with a dividend yield of 8.18%. These dividends have stuck around through multiple down cycles.
Datadog (NASDAQ:DDOG) has been one of the biggest winners of the AI rally, but that didn’t last in 2025 as the company plunged significantly. It is now down nearly 35% from its peak in late 2024, and while it does trade at an expensive valuation, the forward growth here is too stellar to ignore.
The company’s valuation is pretty expensive if you look at forward earnings multiples at 65 times. Many other AI stocks trade at far higher valuations and with less growth potential. Analysts see the company’s EPS more than doubling in the next two years on the higher end of estimates and then almost tripling from there through 2034. This is along the top line growth holding steady at around 18-20% on average through 2030.
There are plenty of positive catalysts going forward, and the company is not entirely reliant on the AI narrative to keep growing. It’s more oriented towards cloud computing, which was booming even before AI.
