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Last year was exceptionally difficult for investors. Benchmark S&P 500: Up 27% in 2021, but the index has retreated into a bear market in 2022 and is on track for its worst performance since the Great Recession. But the worst part is the lingering uncertainty. When will the stock market recover?

Unfortunately, no one knows the answer to that question, but smart investors do know one thing. a bear market is an opportunity to buy good stocks at good prices. For example, Fiverr International (FVRR: -3.11%) and: Zoom Video Communications (ZM: -0.48%) have seen their stock prices drop 90% and 88%, respectively, but both businesses could thrive when economic conditions improve and the next bull market turns around.

Here’s what investors need to know.

1. Fiverr International. shaping the future of work

Fiverr is the cornerstone of the gig economy. Its marketplace connects buyers (businesses) with sellers (freelancers) of digital services, and its product catalog lists more than 550 categories spanning nine industry verticals, covering everything from programming and tech to business and lifestyle.

Fiverr also provides related services that deepen its connections with buyers and sellers. For example, freelancers can access task management software, training content, and promotional tools, while businesses can access freelancer management software and collaboration tools. Those related services make the market stickier, but they also help Fiverr monetize its business more effectively.

In fact, its industry-leading margin (revenue as a percentage of total expenses) rose 160 basis points to 30% in the third quarter. That figure is especially impressive when compared to that competitor’s 15.4% Upwork: reported in the same quarter. That said, Fiverr has seen growth slow amid a challenging economic backdrop. Third-quarter revenue was up just 11% to $82.5 million, and non-GAAP (adjusted) net income was up 11% to $0.21 per diluted share.

Looking ahead, shareholders should be prepared for a further slowdown in growth. As cost pressures weigh down many businesses, Fiverr can vie for new buyers and spend less time with existing buyers. But these are temporary problems, and investors have good reason to believe that Fiverr can accelerate growth as economic conditions improve.

Fiverr has barely scratched the surface of its $247 billion addressable market in the US, and the gig economy is only getting bigger. According to Statista, more than half of all US workers will be freelancing in some capacity by 2027. And with Fiverr stock trading at 3.4 times sales, a bargain compared to its three-year average of 18.7 times sales, now is a good time. buy a small position in this growth stock.

2. Increase. simplifying business communication

Zoom is best known for its video conferencing software, Zoom Meetings, but its offering has expanded into a full suite of cloud communications software. The company recently added a customer service solution (Zoom Contact Center) to its platform, as well as two artificial intelligence software products that boost the productivity of sales and customer service teams (Zoom IQ for Sales and Zoom Virtual Agent).

Zoom became popular during the pandemic as remote work and social distancing drove the adoption of Zoom Meetings. The company reported incredible financial results during that period. in fact, no software company has ever reached $2 billion in annual revenue faster than Zoom, but today things are very different. Revenue rose just 5% to $1.1 billion in the latest quarter, and non-GAAP net income fell 4% to $1.07 per diluted share.

However, Zoom remains well-positioned to re-accelerate growth as the economy stabilizes and business spending recovers, and the investment case is actually stronger today than it was a few years ago. Zoom’s cloud communications platform reduces cost and complexity for buyers by allowing them to consolidate spending through a single vendor. In other words, Zoom offers a cohesive software suite that can replace point solutions and eliminate the need for embedded hardware.

Better yet, as the market leader in video conferencing software, Zoom is particularly well-positioned to drive adoption of related solutions like Zoom Phone, Zoom Rooms, and Zoom Contact Center. And the company is taking advantage of that opportunity. Zoom Phone surpassed 4 million seats in August 2022, up from 2 million in August 2021. Management also noted the strength of Zoom Rooms last quarter and early traction in sales of Zoom Contact Center and Zoom IQ.

That said, none of those related products account for 10% of total revenue, meaning Zoom has barely scratched the surface of its growth potential, let alone its $125 billion total addressable market by 2026. But investors can see remaining performance early momentum on obligation (RPO), which serves as a leading indicator of revenue. RPO grew 32% last quarter. It portends better days ahead for Zoom.

The stock is currently trading at 4.9 times sales, the cheapest valuation in the company’s history. That makes for a very attractive buying opportunity.

Trevor Jennewine has positions on Fiverr International. The Motley Fool features and recommends Fiverr International and Zoom Video Communications. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policy.

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