For the past nine months, the stock market has been practically unstoppable. The benchmark S&P 500 hasn’t undergone a single 5% drop, and it’s nearly doubled since hitting its bear-market low on March 23, 2020…
But despite this record-breaking rally, Wall Street still sees value in a number of high-growth stocks. Based on the highest price target issued by a Wall Street investment bank or analyst, the following five growth stocks are expected to return 110% to as much as 393% to shareholders.
Coinbase Global: Implied upside of 152%
The first rapidly growing stock with abundant upside, at least according to investment firm D.A. Davidson, is cryptocurrency brokerage and ecosystem Coinbase Global (NASDAQ:COIN). If the lofty $650 price target set by D.A. Davidson comes to fruition, Coinbase would deliver gains of 152% to its shareholders, relative to where it closed this past weekend.
On one hand, revenue and profits have soared for Coinbase. Net revenue in the first quarter catapulted to $1.6 billion from $179 million in the year-ago period, with net income of $771 million, up from $32 million. Growing institutional interest in digital currencies like Bitcoin and Ethereum, along with rapidly rising prices for the Big Two in crypto, drove investors to the platform.
On the other hand, the Coinbase operating model has virtually no barriers to entry, and its trading fees are at risk of constantly being undercut by other cryptocurrency exchanges. Additionally, instead of thriving off of innovation, Coinbase is effectively held hostage by external interest in Bitcoin and Ethereum and the price performance of the Big Two digital currencies. When Bitcoin declined by 80% following its late 2017 peak, Coinbase’s revenue was nearly halved.
Long story short, while sales growth has been impressive, Coinbase isn’t charting its own path to success. Its reliance on external factors makes $650 a target that’s unlikely to be reached.
Cresco Labs: Implied upside of 160%
One industry where you’ll find no shortage of aggressive price targets is cannabis — specifically the U.S. pot industry. If the highest price target assigned by Wall Street of nearly $29 for Cresco Labs (OTC:CRLBF) proves accurate, investors in this marijuana stock could enjoy upside of 160%. And unlike Coinbase, this is a price target that I believe can eventually be achieved.
Like other multistate operators, Cresco is expanding its retail operations organically and via acquisition. In June, it opened its 33rd dispensary nationally, and it holds enough retail licenses in its back pocket to eventually have closer to four dozen operating dispensaries.
From a retail perspective, Cresco appears to be focusing its efforts on high-dollar states, as well as those that issue licenses on a limited basis (e.g., Illinois, Ohio, and Pennsylvania). The advantage of limited-license states is they’re purposefully reining in competition. That means Cresco will…
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