2 Growth Stocks I’d Buy — but Only at Much Lower Prices

The current market for growth stocks is a tale of two extremes: some names have soared on speculative momentum, while others face a reckoning as valuations clash with fundamentals. With the Morningstar US Growth Index down 17.5% year-to-date through April 2025, investors are re-evaluating which high-flyers might still hold promise — if only priced right. Among the overvalued growth stocks flagged by analysts, two stand out as candidates for cautious optimism: Boston Scientific (BSX) and Spotify (SPOT). Both boast compelling long-term narratives but currently trade at premiums that demand patience. Here’s why — and at what prices they’d become buys.

1. Boston Scientific (BSX): A Medical Innovator Stretched Thin

Current Premium to Fair Value: 12% ($84/share)
Recent Performance: +36% YTD, but -1.3% over the last 3 months

Boston Scientific is a leader in medical devices, riding trends like aging populations and demand for minimally invasive procedures. Its narrow economic moat stems from proprietary technologies in areas like heart rhythm management and neurovascular tools. Yet its current valuation reflects optimism that’s outpacing reality.

Why Wait?
- Valuation Overreach: At a 12% premium, BSX is priced for perfection. Morningstar’s fair value assumes high growth in its electrophysiology and neuromodulation segments, but execution risks remain.
- Margin Pressures: Rising tariffs on imported components and pricing pressures in healthcare systems could squeeze margins.
- Technical Indicators: The stock’s 50-day moving average has crossed below its 200-day line — a “death cross” signaling further downside.

Buy Below: $70/share (a 16% pullback from current levels). At this price, the stock would trade at a 15% discount to its $84 fair value estimate.

2. Spotify (SPOT): Streaming’s Overhyped Growth Story

Current Premium to Fair Value: 21% ($450/share)
Recent Performance: +79% YTD, but “High” uncertainty rating

Spotify’s dominance in audio streaming is undeniable, with over 100 million paying subscribers. Its pivot to AI-driven recommendations and podcast integration aims to fend off rivals like Apple Music and Amazon. But its valuation is a leap of faith.

Why Wait?
- AI Hype vs. Reality: The stock’s premium assumes Spotify’s AI investments will supercharge subscriber growth and ad revenue. Yet competitors like TikTok and Deezer are nipping at its heels, and monetizing podcasts remains a work in progress.
- Cash Flow Concerns: Despite growth, Spotify’s free cash flow remains negative. A premium this high demands flawless execution.
- Sector Risks: The broader tech sector — including streaming — faces valuation resets as investors grow wary of overhyped AI narratives.

Buy Below: $350/share (a 22% decline). This would bring SPOT to a 10% discount to its $450 fair value, creating a margin of safety.

Why These Two, and Not Others?

While other overvalued names like 3M (29% premium) or Trane Technologies (42% premium) are tempting, they face steeper valuation cliffs. BSX and SPOT stand out for their:
1. Defensible Moats: BSX’s medical tech and SPOT’s content library offer sustainable advantages.
2. Sector Resilience: Healthcare and entertainment are less exposed to tariff-driven inflation than industrials or semiconductors.
3. Near-Term Catalysts: BSX’s launch of the Synergy II heart valve and SPOT’s AI-powered “Daily Mix 4” could deliver growth if priced correctly.

Conclusion: Patience is the Investor’s Edge

The market’s April 2025 correction has already begun to address overvaluation in growth stocks, but not enough. For Boston Scientific and Spotify to become buys, their prices must align with fundamentals — not hype.

• Boston Scientific: A $70 entry would reflect a 15% discount to its $84 fair value, offering a cushion against margin pressures and regulatory risks.
• Spotify: Trading below $350 would mean a 10% discount to its $450 fair value, finally pricing in execution risks rather than assuming flawless AI-driven growth.

Investors should also monitor broader trends: the Nasdaq’s 7.5% drop from 2025 highs suggests growth stocks have further to fall. As Morningstar notes, value stocks (down just 5% YTD) and defensive sectors like energy and telecom remain safer havens until overvalued names correct.

In short: these two stocks are worth buying — but only when the market stops pricing in miracles and starts reflecting reality.