2 Stocks Down 45% and 37% to Buy Right Now

Buying stocks on the dip can be an effective strategy for long-term investors because it allows you to acquire shares in quality companies at a discounted price, which can also lower your average cost per share and amplify your total returns when the market eventually recovers. Although markets fluctuate in the short term, they tend to rise over the long run.

Purchasing fundamentally sound assets on sale during temporary downturns caused by general market sentiment or overreactions to news, rather than a permanent change in their intrinsic value, can also be a valuable strategy as you build out a profitable portfolio.

On that note, here are two stocks trading down significantly that could be compelling businesses to buy and hold for the long run.

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1. Lululemon Athletica

Lululemon Athletica's (NASDAQ: LULU) stock price is down about 45% from one year ago. Slowing sales growth in North America, increased competition, the impact of tariffs on margins, and a recent CEO transition have all been developments that seem to be putting pressure on the stock.

In mid-December, it was announced that Calvin McDonald was leaving his role as CEO, effective Jan. 31, 2026, after nearly seven years in the role. Chief financial officer Meghan Frank and chief commercial officer André Maestrini will serve as interim co-CEOs during the search for a replacement.

Meanwhile, investment management firm and activist fund Elliott Management recently took a significant stake in Lululemon and is reportedly playing a role in the decision as to who will take the helm next.

Investors will have to wait to see who that is. It's worth noting, though, that not all the issues affecting this business are specific to Lululemon. In a weakening economy where consumers are hesitant to spend on certain nondiscretionary items, it's not surprising that premium athleisure wear has also been hurt. Case in point: Net revenue in the Americas (the company's core market) decreased by 2% in the third quarter, with comparable-store sales dropping 5%.

That said, the international segment is a major bright spot, and its net revenue soared 33% in the third quarter. Lululemon also realized a 46% revenue gain in China and a 19% increase in its Rest of the World segment.

This growth is helping to offset North American weakness and underscores the company's global reach in new, underpenetrated international markets. It remains a top women's active apparel brand in the U.S. and is addressing its product issues by accelerating development times and planning an infusion of new styles that could replace 35% of the spring 2026 product lineup.

Lululemon has cultivated an incredibly loyal customer base through community engagement, hosting in-store events, and using local fitness ambassadors rather than celebrities. This strategy tends to turn customers into brand advocates and reduce marketing costs.

The company is known for its high-quality, technically advanced fabrics and functional designs that justify premium pricing and help it maintain high gross margins. By controlling its distribution through company-owned stores and a strong e-commerce channel, management has been able to maintain pricing power, manage inventory tightly, and retain higher profit margins.

The company's fortress-like balance sheet has over $1 billion in cash and zero long-term debt, which can provide significant financial flexibility for strategic investments and share repurchases. It also generates high returns on invested capital (ROIC) of around 30%, a key metric for long-term wealth creation. Lululemon's revenue is still growing (7% in the third quarter), and it remains profitable, having delivered net income of $306.8 million in the quarter.

After falling so much in 2025, shares trade at a significantly cheaper valuation, with a forward price-to-earnings ratio (P/E) around 15 compared to its historical average of over 30. This suggests that much of the bad news may already be priced into the stock. For investors willing to ride out some volatility as Lululemon navigates its next chapter under new leadership, which could bring a new growth strategy, now could be a smart time to buy shares on the dip.

2. Zebra Technologies

Zebra Technologies' (NASDAQ: ZBRA) stock price is down almost 37% from its price one year ago. The company provides hardware, software, and services that digitize and automate front-line workflows for its clients. Zebra specializes in smart data-capture and enterprise-asset intelligence, which helps businesses track and manage their assets, people, and transactions in real time.

The company makes money by selling hardware devices, software subscriptions, supplies (like labels and ribbons), and service contracts across various industries, including retail, healthcare, manufacturing, and logistics. Its Enterprise Visibility & Mobility (EVM) segment accounts for about two-thirds of its total revenue. The rest comes from its Asset Intelligence & Tracking (AIT) segment.

The EVM segment specializes in rugged and enterprise-grade mobile computing devices, data capture technologies, and related software. In the third quarter, the segment generated $865 million in net sales, representing the majority of the company's $1.32 billion total revenue for the quarter. That overall top-line figure was up about 5% from one year ago.

The AIT segment brought in $455 million in net sales. It focuses on barcode printing; asset tracking; and location solutions, including RFID tracking cards, services, and supplies.

The accelerating shift toward automation, digital transformation, and real-time workflow optimization continues to fuel robust demand for Zebra's portfolio. Over 80% of Fortune 500 companies use its technology.

Zebra Technologies has been building on its expertise in foundational artificial intelligence (like machine vision/scanning) for years, but recently the company has significantly accelerated its focus on launching new AI tools and advanced applications. Zebra's AI strategy includes integrating advanced chipsets into its next-generation handheld and wearable devices to enable edge AI processing. It's also developing a suite of AI-powered applications, companion agents, and software.

One of its products is Zebra Companion, a new suite of multimodal generative AI agents designed to assist frontline workers with intelligent, instant answers to complex queries. The company is running pilot programs with customers in the retail and transportation/logistics sectors to demonstrate the value of its various AI solutions before a wider rollout and commercialization. Zebra should start to realize revenue from all this starting in 2026.

The company has also decided to exit its autonomous mobile robotics (AMR) division. While Zebra Technologies is in a time of transition, investors who find its growth story compelling -- along with its more defined pivot into AI software and hardware -- may want to take a second look at the stock.

Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and Zebra Technologies. The Motley Fool has a disclosure policy.