Since the end of the Great Recession, growth stocks have been the best place to put your money to work in the market. Historically low lending rates, coupled with predominantly dovish monetary policy from the Federal Reserve, have created a perfect scenario for fast-paced companies to hire, innovate, and acquire other businesses…
But over the past two months, rising Treasury yields have incited brief, yet steep, sell-offs in growth stocks. What’s been an unsettling move lower to some folks represents an opportunity to buy rapidly growing stocks at a substantial discount for long-term investors.
Based on Wall Street’s one-year consensus price targets as of April 5, the following five growth stocks all offer upside ranging between 43% and 70%.
Teladoc Health: Implied upside of 43%
Let’s begin with telehealth provider Teladoc Health (NYSE:TDOC). Teladoc has lost close to 40% of its value in less than two months, primarily as a result of the U.S. successfully administering over 167 million coronavirus vaccines as of April 5. With nearly a quarter of the adult population fully vaccinated, and Amazon announcing a nationwide expansion of its virtual-care platform, there’s been some concern about where Teladoc goes from here.
As for Wall Street, the answer is pretty clear: It goes up. With a consensus price target of almost $260, Teladoc offers implied upside of 43% over the next year.
Teladoc is the leading provider of telehealth services in the U.S. and handled nearly 10.6 million virtual visits last year. The beauty of telemedicine is that it’s a win up and down the healthcare-treatment chain. It’s more convenient for patients, can allow physicians to better keep tabs on at-risk patients, and billed more cheaply than office visits, which health insurers love.
Also, don’t forget that Teladoc acquired leading applied health-signals company Livongo Health in November. Livongo’s solutions are aided by artificial intelligence and are designed to send tips and nudges to patients with chronic illnesses to help them lead healthier lives. Livongo already has well over 500,000 enrolled diabetes members, and its platform provides a perfect jumping-off point for Teladoc to cross-sell its own solutions.
Datadog: Implied upside of 47%
Opportunistic investors might be able to make bank with cloud-based application-monitoring company Datadog (NASDAQ:DDOG), as well. Though shares of Datadog have fallen by more than 30% from their all-time high, Wall Street believes the company has up to 47% upside, based on its one-year consensus price target.
The good news for Datadog is that the end of the pandemic shouldn’t mean an end to its rapid sales growth. With more businesses than ever shifting online and into the cloud, we’re unlikely to see this trend reverse once workplaces reopen. The ability to understand customer behaviors, monitor key applications in real time, and understand important financial data is more critical now than ever before — and the company’s operating results prove it.
Although Datadog’s total customer count with at least $100,000 in annual recurring revenue (ARR) grew by 46% in 2020 to 1,253, the figure that really stands out is the…
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