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It's generally been a good year for investors, but not every stock is having a 2023 to remember. There are 180 U.S.-listed stocks with market caps north of $200 million that have fallen by at least 50% this year. Some of them will continue sliding into 2024, but some of these laggards are opportunities.

As of November, Chewy (NYSE: CHWY), Sleep Number(NASDAQ: SNBR), and Chegg (NYSE: CHGG) had plummeted 50%, 64%, and 59%, respectively, this year. They would have to more than double just to get back to where they were at the start of 2023. Let's go over the reasons why they may have a big year in 2024.

1. Chewy

It's raining dogs, cats, and downticks for Chewy this year. The leading online retailer specializing in pet products has seen its stock halved, but it's not as if its business is rolling over and playing dead. Chewy is still growing and is now consistently profitable.

Net sales rose 14% in its latest fiscal quarter, and 15% the period before that. Chewy keeps posting double-digit gains on the top line, a streak that stretches back to its initial public offering (IPO) more than four years ago. It's also now profitable, rattling off six consecutive quarters in the black. In an interesting twist, analysts have been modeling a loss in all six of those reports.

Chewy has been steady, clocking in with 13% to 15% in each of the last six profitable quarters. Why is Chewy trading 50% lower in 2023 despite its consistency? The biggest culprit is that its active customer base is stalling. The 20.4 million customers it was serving in its fiscal second quarter is 0.6% lower than where Chewy was a year ago. Chewy also noted in its last earnings call that some of its customers were making more value-conscious decisions with pet food, something that could weigh on the e-tailer's margins as well as all pet food stocks.

The sell-off still seems overdone. Net sales still rose 14% in its most recent report despite a slight decrease in active customers because the average account was spending 15% more. Chewy's Autoship platform that encourages loyalty through discounts on automatically scheduled repeat purchases saw its sales volume climb 18% over the past year. Chewy's guidance calls for revenue growth to slow to an 8% to 9% pace -- an end to its streak -- but the market has seen Chewy exceed its conservative outlooks before.

The kittens and puppies that folks took in during the early days of the pandemic aren't going away, and they are even bigger and hungrier now. The moment that Chewy can get its customer base growing again the stock will follow. Along the way it's making a push into Canada and turning to higher-margin offerings including pet care and sponsored ads. Not every dog stock has its day, but Chewy should recover in the year ahead.

2. Sleep Number

Like lowering the firmness setting on one of its air-chambered mattresses, Sleep Number keeps sinking. The latest hit came recently when the stock was booted from the S&P 600. Yes, the small-cap-heavy S&P 600. The third-quarter results it posted in November were a sleep-jarring nightmare. Sleep Number fell well short of market expectations, and softening demand for its high-end beds found it revising its full-year guidance sharply lower. It's now bracing investors for a loss, down from the $1.25 to $1.75 a share in earnings it was targeting over the summer.

Sleep Number has gone through the full range of financial performances since the pandemic. Its sleep-improving mattresses sold briskly in 2020 and 2021 as folks sheltering in place were investing in improving the quality of their home life. The streak of positive annual revenue growth ended at 12 years in 2022 when supply chain constraints led to a backlog of delayed orders. Now it's a demand problem, as the cooling real estate market and consumers hesitant to spend four figures on a high-tech "smart" bed are weighing on sales.

The silver lining here is that the stock recently traded at a 12-year low. The red ink is problematic, and Sleep Number's sizable debt will bear watching. However, the stock was selling for less than 2 times what it earned in either 2020 or 2021. As interest rates stabilize and the real estate market recovers don't be surprised if Sleep Number is one of 2024's biggest comeback stories.

3. Chegg

For every winner there's a loser, and shares of Chegg plummeted 48% in just one May trading day when it warned that artificial intelligence (AI) -- more specifically, OpenAI's ChatGPT -- was disrupting subscriber growth for its tutoring service that blends on-demand assistance with human instructors.

More:The U.S. hasn't dodged a recession (yet). But these signs point to a soft landing.

The reason to be hopeful is that the trend hasn't really deteriorated from the weakness it began showing early last year. Revenue has declined by 2% to 7% for six consecutive reports, and October's 4% slide in its latest quarter was in the middle of that pack. Profit forecasts have been inching higher since its latest financial update, and Chegg was recently trading for less then 10 times trailing and forward adjusted earnings.

Rick Munarriz has positions in Sleep Number. The Motley Fool has positions in and recommends Chewy. The Motley Fool recommends Chegg and Sleep Number. The Motley Fool has a disclosure policy.

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