3 Top Growth Stocks to Buy Right Now

Finding growth stocks with low downside volatility is always a daunting task, even more so when the equity market is at an all-time high. The S&P 500 Shiller cyclically adjusted price-to-earnings ratio, which is an inflation-adjusted valuation metric, was 37.98 in July 2021. This is the highest it has been in the past three years.

In such a market environment, companies that have fallen from public grace despite growing revenue and earnings faster than the market average can prove to be attractive long-term picks. With that in mind, Corsair Gaming (NASDAQ:CRSR), Zillow Group (NASDAQ:Z)(NASDAQ:ZG), and Magnite (NASDAQ:MGNI) look like top growth stocks to buy right now.

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1. Corsair Gaming

The COVID-19 pandemic has enhanced the long-term growth story of this leading one-stop shop for high-performance gaming hardware and streaming equipment. Shelter-in-place orders led to a rise in overall gaming activity, mainly due to the absence of many entertainment alternatives.

While the pace of new customer acquisition may slow down as the pandemic fades, Corsair is anticipating robust demand from older customers upgrading to specialized gear, including gaming PCs and peripherals. This should emerge as a solid growth driver, especially since the penetration of specialized gaming hardware in the U.S. is still very low. The rising popularity of competitive gaming and esports, the eventual end of semiconductor shortages, and 5G implementation will also drive demand for gaming hardware. Self-broadcasting (livestreaming), an addressable market estimated to be worth $1 billion, is also contributing to growing demand for Corsair’s streaming products.

Thanks to its solid brand positioning and leadership in the majority of its end markets, Corsair can take full advantage of these tailwinds. Acquisitions of high-end esports controller manufacturer Scuf Gaming and Elgato’s livestreaming business have further strengthened Corsair’s product portfolio.

In the second quarter, revenue jumped 24.3% year over year to $473 million, which is impressive considering the prior-year period’s 57.7% growth. Gross margin has also expanded by 870 basis points in the past two years.

The stock is down 24% year to date after higher logistics costs in the second quarter led adjusted earnings per share of $0.36 to fall short of the analyst consensus. While the company expects some of the logistics-related headwinds to continue in the third quarter, management has maintained its full-year fiscal 2021 guidance. The company is trading at only 1.3 times trailing 12-month sales, a bargain for a profitable gaming company riding several major trends in its industry.

2. Zillow Group

Zillow Group is best known for its websites and mobile apps such as Zillow, Trulia, HotPads, and StreetEasy, which together facilitate buying, selling, renting, and securing financing for properties. By offering a one-stop shop for a…