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1 Growth Stock Down 56% to Buy Right Now - Don’t Miss This Dip Opportunity

1 Growth Stock Down 56% to Buy Right Now - Don’t Miss This Dip Opportunity

Author:
foolstock
Published:
2025-08-25 20:15:00
9
3

Blood in the streets? Smart money's already circling.

THE 56% PLUNGE: OPPORTUNITY OR TRAP?

That brutal correction wiped out more than half its value—but fundamentals haven't changed. This isn't some meme coin collapsing under its own hype. We're talking about a project with actual utility, real adoption metrics, and a team that keeps delivering while others post cringe Twitter threads.

WHY THIS DIP SMELLS LIKE 2017 BTC

Remember when Bitcoin crashed 80% and 'experts' declared it dead? Those who bought then are laughing all the way to the bank today. This selloff reeks of weak hands panic-selling—the same crowd that buys high and sells low while complaining about market manipulation.

THE GROWTH ENGINE IS STILL REVVING

User acquisition costs are dropping while network activity hits new highs. Developers keep building despite the price action—because they actually care about the technology, not just lambo dreams. Meanwhile, traditional finance still can't wrap its head around yield that doesn't come from loaning out your shares to short sellers.

BUY WHEN THERE'S BLOOD IN THE STREETS

Even the suits are starting to get it—BlackRock's filing ETFs while your financial advisor still thinks blockchain is something you use to secure your bicycle. This isn't financial advice, but watching institutions FOMO in after retail capitulates? Classic.

Timing the bottom is impossible, but buying quality at a discount never goes out of style. Just don't come crying when it's back at ATH and you're still waiting for your bank's 0.5% 'high-yield' savings account to compound.

A family on a cruise ship.

Image source: Getty Images.

Full speed ahead

Carnival is the largest cruise operator in the world, with $26 billion in trailing 12-month sales and 90 ships across its brands, compared with $17 billion and 68 ships for competitor.

In a case of the larger it is the harder it falls, Carnival has had a massively difficult time rising from pandemic lows. At this point, it's reporting record revenue and records across many other metrics; demand is at all-time highs, and it's maintaining its record future booked position.

There's progress and development all over. Ticket prices and occupancy levels are at highs, operating margin continues to expand and exceed pre-pandemic levels, and adjusted net income tripled from last year in the 2025 fiscal second quarter (ended May 31).

The company is expanding its fleet of ships to handle more demand and generate higher sales, and it's launching new, exclusive destinations to improve its value proposition and bring back repeat customers. For example, Celebration Key, which includes the largest adults-only private beach club at any cruise venue, launched in July, and the Seaborn brand is launching its first "Pole-to-Pole" voyage in 2027.

So what's the problem?

Debts and losses

Carnival is still picking up the pieces, specifically related to net income and debt. Although net income improved by $475 million from last year in the second quarter, it's still off of its prepandemic highs. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is at record highs, and it looks like only a matter of time before the company surpasses the previous record for net income, too.

The more pressing concern is Carnival's debt. It still tops $27 billion, and it's going to take a long time to get to historic levels even under the best circumstances. However, higher interest rates over the past few years have meant that this isn't even the best of circumstances. It has been doing a good job of paying it off despite the tough environment, and it's already paid of $350 million of its highest-interest debt and refinanced $7 billion at better rates so far this year.

That brings us to why last week's announcement sent the stock up. As interest rates go down, it will be easier for Carnival to pay off the debt responsibly. The fear is that sales growth will slow before there's enough "extra" money to keep paying down the debt. Lower rates make it more likely cruise-goers will keep buying tickets, keeping the growth rates stable, as well as cutting the cost of the debt.

Due to the risk here, Carnival trades at a cheap price today. Its forward, 1-year P/E ratio is only 13, while the price-to-sales ratio is 1.7. Those price in the risk, but they give it plenty of room to expand.

I don't want to dismiss the risk, but Carnival is a well-run company with best-in-class products and services and a long growth runway. It's likely that it will continue to recover and operate at historical debt levels, even though it will take a few years. If you can manage the risk and have a few years to hold on, which is the ideal anyway, Carnival should reward you many times over.

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