Wall Street's major market indices treated investors to double-digit returns last year, but plenty of stocks didn't go along for the ride. A lot of names you know -- including Zillow (NASDAQ:ZG) (NASDAQ:Z), Peloton Interactive (NASDAQ:PTON), and Teladoc (NYSE:TDOC) -- took big steps back in 2021.
All three stocks lost more than half of their value last year. They have a chance to bounce back in 2022, but can they double in these next 12 months? Zillow, Peloton, and Teladoc would have to more than double to get back to where they were at start of last year. Let's see why that can happen.
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The housing market was been heating up over the past year, so it may seem odd to see the leading online portal dedicated to the real estate market shed 54% of its value in 2021. The biggest hit happened in early November, when the shares took a 23% dive in a single day when the company announced that it was ending its Zillow Offers program.
Zillow Offers was the portal operator's once ambitious program to enter the home-flipping market. It would buy houses, spruce them up as needed, and sell them ideally at higher prices. If anyone should excel at flipping a property, one would think that it would be Zillow. After all, this is the company that owns not just its namesake site but also popular homebuying and rental outposts Trulia, StreetEasy, and HotPads. It has valuable info on where folks are hunting for new homes. It also has interests and affiliates across the entire homebuying process, including mortgage preapprovals, mortgage financing, and closing, title, and escrow services.
The problem with Zillow Offers is that flipping a property isn't as easy as it seems. It also must have rubbed real estate agents the wrong way after paying Zillow for increased exposure and leads. I'm in the minority, it seems, in being happy to see Zillow exit the iBuying market. Zillow Offers was a drain on the company's bottom line, and the business it leaves behind is pretty strong. Zillow's revenue, if you back out Zillow Offers, is profitable and grew by 37% through the first nine months of 2021.
The hardest hit of the three stocks on this list is Peloton, plummeting a staggering 76% in 2021. Put another way, it would have to more than quadruple to get back to where it was at beginning of last year.
The past year has been brutal for Peloton, but people are returning to in-person gyms and spinning classes. Peloton's immersive treadmill and stationary bike workouts that were so essential in 2020 when the pandemic hit are seemingly less important now.
Peloton also had a rough break after recalling its treadmill following reports of injuries to pets and young children, including one human fatality. Treadmills in general are dangerous without safeguards, but Peloton became headline fodder for the wrong reasons as the top brand in premium home fitness.
I still like Peloton's chances. There were a record 2.5 million connected fitness subscribers by the end of September. Peloton has experienced two quarters of sequential dips in revenue and total workout sessions, but it's certainly not a quarter of the company it was a year ago. And COVID-19 may not be going away anytime soon. During last week's market sell-off of growth stocks, Peloton shares marched in place. It seems to be bottoming out here.
Another stock that hasn't fared well coming out of the pandemic is Teladoc. It was a market darling in 2020 as folks turned to videoconferencing for consultations with doctors, psychiatrists, wellness coaches, and other medical professionals. The stock tumbled in 2021 as medical offices began welcoming patients again, but something tells me folks have been spoiled by not having to dress up, head out to a waiting room, and waste what could be hours for something that can be done in minutes online without ever leaving the home or office. Companies are also embracing telehealth as a way to remain productive.
Telemedicine isn't going away, and neither is Teladoc. The currently out-of-favor company is telling investors it expects to deliver $2.6 billion in revenue this year, up from roughly $2 billion in 2021. It's eyeing $4 billion on the top line come 2024. Like Peloton, Teladoc is another stock that should be trading higher with a rise in COVID-19 cases -- but it's well positioned to continue being the picture of health when we get past the pandemic.
Zillow, Peloton, and Teladoc continue to be promising growth stocks. Their core businesses remain strong, and they are reasonable candidates to at least double this year to begin making back the ground they lost in 2021.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Rick Munarriz owns Teladoc Health. The Motley Fool owns and recommends Peloton Interactive, Teladoc Health, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool has a disclosure policy.