For more than a decade, growth stocks have proved unstoppable. A perfect storm of historically low lending rates, ongoing bond purchases by the nation’s central bank, and now big spending from Washington, has allowed fast-growing companies to thrive…
And yet, even with many of the broader market indexes hitting new all-time highs, Wall Street still foresees ample upside for a number of high-profile growth stocks. Based on the highest price target estimate for each of the following five growth stocks, Wall Street sees upside ranging from 62% to as much a 144% over the coming year.
NIO: Implied upside of 104%
The first supercharged growth stock Wall Street sees driving away from its competition is electric-vehicle manufacturer NIO (NYSE:NIO). Even though NIO is getting near the mean consensus price target, the high-water mark among analysts calls for the company to hit $92 a share. That implies a more than doubling in NIO’s shares, based on where it closed this past weekend.
The bullishness surrounding NIO likely has to do with the company’s location and its ability to scale production. Concerning the former, China is the largest auto market in the world. By 2035, the projection is that half of all vehicles sold will be powered by some form of alternative energy, 95% of which are EVs. Since the EV market is still nascent in China, the door is wide open for NIO to become a major player.
NIO has also done an excellent job of ramping up production over the past year. Even though output is currently constrained by a global chip shortage, it’s on track to deliver between 21,000 and 22,000 EVs in the second quarter. For some context, it delivered only 20,565 vehicles in the entirety of 2019.
With NIO sitting on a mammoth cash pile and introducing a high-margin battery subscription service last year, this lofty price target may one day be achievable — but probably not in 12 months.
Teladoc Health: Implied upside of 82%
Leading telehealth platform Teladoc Health (NYSE:TDOC) offers abundant upside, if the most aggressive price target on Wall Street proves accurate. According to BTIG analyst David Larsen, Teladoc is a buy with a $300 one-year price target. This implies up to an 82% increase in its shares.
Some folks might think Teladoc’s 2020 was a bit fluky given the coronavirus pandemic. After all, with physicians wanting to keep high-risk and potentially infected people out of their offices, virtual visits skyrocketed to almost 10.6 million from 4.14 million in 2019. But the fact remains that Teladoc grew sales by an annual average of 74% in the six years leading up to the pandemic. This demonstrates that telemedicine was catching on long before the pandemic struck.
While telehealth can’t always replace in-office visits, virtual appointments are substantially more convenient for patients, and they should allow physicians to better keep track of key health metrics for chronically ill patients. In short, telehealth is a ticket to improved health outcomes, which insurers should appreciate (since it’ll mean less money out of their pockets).
Also don’t overlook that…
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