Got $1,000? 2 stocks to buy now while they’re on sale

The market is rising, but some stocks are still on the outside looking in. The actions of Celsius Holdings (CELCH -2.62%) and Dave & Buster’s (PLAY 1.57%) they are trading for less than the all-time highs they hit earlier this year.

These are not perfect companies. Some of the drops were earned. However, it seems that pessimism has overtaken reality. I think both stocks could be bargains at current levels. Let’s take a closer look at these two stocks that could be compelling bargains for the next $1,000 you put to work in the market.

1. Celsius Holdings

The specialty beverage giant went from feast to famine pretty quickly, with shares down 67% since hitting an all-time high in March. Celsius grew so quickly a year ago that it declared a 3-for-1 stock split in November. It has now executed a 3-for-1 stock split without issuing any new shares.

Growth has slammed on the brakes for the company behind functional fruit-flavored sparkling drinks that help trigger thermogenesis to boost metabolism. The same company that doubled its sales in each of the last three years slammed on the brakes. Revenue growth slowed to 29% in the first half of this year, and now it’s reversed. Analysts are bracing for a 20% year-over-year drop in revenue for the quarter ending next week.

Image source: Getty Images.

This is an understandably scary scenario for an investment that was once one of the best stocks on the market. The most recent step down came earlier this month at an analyst presentation. Celsius revealed that orders from PepsiCo (PEP -0.69%) — a minority shareholder of Celsius and its main distributor — would be down as much as $120 million in the third quarter. Celsius pointed out that retail scanner data shows its product sales are up 10 percent this summer, but PepsiCo is reducing its inventory.

Can Celsius make a comeback? Even PepsiCo noted a few months ago that thirsty consumers are turning to more traditional forms of hydration in this hotter-than-usual summer. Sales should pick up in the fall, but this it is it is problematic that PepsiCo continues to reduce its Celsius orders.

Analysts cut their top- and bottom-line targets, but see sales rebounding to 13% growth in the fourth quarter and 17% in 2025. Out-of-favor beverage stocks may not look cheap at 32 times forward earnings bigger. , but a change in momentum can drive the bottom line higher and earnings multiples lower. Keep an eye on international sales that are still not moving the needle, but are growing faster than domestic revenue.

2. Dave & Buster’s

It’s all fun and games until your stock drops 54% from its all-time spring high. The chain of big-box entertainment centers that offer arcade games, casual dining and event spaces has also slowed business. Trailing revenue in the last four quarters rose just 1% from contracting profit margins.

A 6% drop in same-store sales for its latest quarter is a killer, but Dave & Buster’s beat earnings expectations after back-to-back misses. With margins starting to recover, the next goal is to bring people back to its indoor havens of food, fun and entertainment. The chain has revamped its menu and is remodeling its look to make it more appealing.

Wall Street professionals see earnings accelerating in the next fiscal year. The stock is selling for less than 9 times next year’s estimated earnings. The turnaround plan could fall apart, and Dave & Buster’s leveraged balance sheet limits the number of times it can hit the “continue” option in this real-life arcade game.

However, if lower fares can keep the economy going, it’s easy to see traffic starting to pick up at your local Dave & Buster’s location. This is not half the company it was in April. It’s on sale and you can’t say that about too many stocks these days.