2 Top Bargain Stocks Ready for a Bull Run

Besting the market requires contrarian thinking. When stocks are falling and everyone around you is panicking, that's when you need to exhibit calm behavior and keep a long-term focus for your portfolio. Eventually, stock prices follow the business fundamentals, which is why falling prices create buying opportunities for high-quality businesses. I have two stocks in large multi-year drawdowns that I believe are ready for a bull run.

Enter Airbnb (NASDAQ: ABNB) and Remitly Global (NASDAQ: RELY), two disruptive businesses with stock prices trading at dirt cheap prices. Here's why the online travel platform and mobile remittance provider are both set up for great returns over the next decade.

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Innovations in remittance payments

Historically, sending money to someone internationally was a pain. Banks would have large expenses, and legacy cash providers such as Western Union would charge hefty fees to convert currency and send it to someone in another country. Today, modern digital connectivity and mobile devices are enabling disruptors to take over the space. With Remitly Global's sleek application and broad acceptance, immigrants can send money back home seamlessly from their mobile wallets with just a few clicks and much smaller fees than Western Union.

This better value proposition has enabled Remitly to rapidly gain market share in remittances in the last few years. Today, it sits at around 3% market share, with $15.4 billion in send volume through its mobile application just last quarter. Customers are growing 32% year over year, with revenue growing 33%. It's not highly profitable, but with low fixed costs and strong unit economics, Remitly Global will be able to expand profit margins once it stops growing so quickly.

Today, investors should cheer aggressive spending to expand the platform and capture share in this large market. Third-party analysts expect the remittance sector to grow at a 10% clip through 2030, which should help Remitly post strong double-digit growth as it keeps gaining market share. If revenue grows on average by 20% a year for the next five years -- a slowdown from current levels -- the top-line figure will eclipse $3.1 billion.

Today, Remitly trades at a market cap of $4 billion. As long as its unit economics remain strong, Remitly looks like a promising growth stock to buy for the rest of the decade.

Airbnb's growing scale

One of the most famous disruptors of the 21st century is Airbnb. Its home sharing model has opened up a whole new way of traveling, as well as some controversies with local governments. Luckily for shareholders, the good has outweighed the bad in this regard, leading to steady long-term growth of the platform (excluding the COVID-19 pandemic mayhem).

Last year, Airbnb's revenue grew 12% year over year to $11.1 billion. It generated $4.5 billion in free cash flow for a strong 40% free cash flow margin. This number will generally look attractive for Airbnb, given that it collects deposits from travelers upfront before disbursing them to hosts after the vacation ends. This means that it will carry more in cash on the balance sheet than it has actually earned in profits. Net income was still strong in 2024, with a 26% margin for the year.

This is despite Airbnb spending aggressively to grow its platform. It is marketing in foreign geographies that have lagged in market share historically, which is helping to accelerate growth in places like East Asia and Latin America. Plus, management has talked up huge investments it has made to add more products and services to the platform. These services cost a lot to build in advance, but will not launch until later this year. After launch, I expect Airbnb's profit margins to keep inching higher in the years to come, which will help it grow earnings consistently.

Lastly, Airbnb management is buying back its stock, which will lead to a shrinking share count and faster growth in earnings per share (EPS) over the long term. Today, the stock trades at a slightly elevated forward price-to-earnings ratio (P/E) of 26.6, which may seem expensive. However, Airbnb should be able to grow EPS at a fast rate due to its revenue growth, margin expansion, and share buybacks. This makes the stock a strong candidate to go on a bull run for the rest of the decade.

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Brett Schafer has positions in Remitly Global. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy.