A little over 15 months ago, panic ruled the roost on Wall Street. The coronavirus pandemic had its grip on the world, and it was unclear when things would return to normal. This fear ultimately shaved 34% off of the benchmark S&P 500 in about a months’ time…
However, patience is a powerful tool on Wall Street. People who’ve allowed their investment thesis to play out have enjoyed a 95% bounce in the widely followed S&P 500 from its pandemic lows. And if you were to ask Wall Street analysts, they’d tell you there’s more upside to come.
For each of the following five supercharged stocks, the high-water price target from Wall Street implies upside over the next 12 months ranging from 115% to as much as 177%.
Netflix: Implied upside of 115%
The unquestioned biggest name on this list is streaming kingpin Netflix (NASDAQ:NFLX). Although the consensus price target from all 40 analysts covering the company is that it’ll head higher by 14% over the next year, one Wall Street firm anticipates Netflix could make a run at $1,154, placing its implied upside at a cool 115%.
Clearly, a lot of things have gone right for Netflix. The pandemic kept people in their homes and in search of entertainment. This sent subscriber figures through the roof, ultimately pushing global streaming paid memberships to 207.6 million by the end of March 2021.
Netflix has also benefited for a long time from its vast content library and its plethora of original content. In fact, a lot of the company’s spending in recent years has gone to content creation in an effort to gain and retain subscribers.
But a doubling in Netflix’s share price over the next year could prove difficult. Walt Disney has seen its Disney+ streaming service top 100 million subscribers in a little over a year since its launch. As cord-cutting ramps up and streaming options become more mainstream, Netflix could find it tougher to maintain its growth rate and its premium valuation.
Coinbase Global: Implied upside of 156%
Cryptocurrency brokerage and ecosystem Coinbase Global (NASDAQ:COIN) also offers incredible upside, at least in the eyes of Gil Luria at D.A. Davidson. If Coinbase were to reach Luria’s price target of $650 over the next year, it’d return 156% for its shareholders.
To reach this lofty price target, Coinbase would need to capitalize on sustained crypto euphoria. Specifically, it generates the bulk of its revenue from trading in the Big Two: Bitcoin and Ethereum. With digital currencies soaring throughout the first quarter, Coinbase announced that net revenue catapulted to $1.6 billion from $179 million in the year-ago period, with net income soaring to $771 million from $32 million in Q1 2020.
The problem is that euphoria in the cryptocurrency space is never sustained. Rather, digital currencies are prone to boom-and-bust cycles. Bitcoin, for instance, has had three separate drawdowns of at least 80% over the past decade. When crypto prices fall, interest in digital currency investing tends to decline rapidly, as well. The last time Bitcoin lost 80% of its value, Coinbase’s net revenue was nearly halved.
There’s also the concern that competing brokerages could undercut the fees Coinbase charges. Since there’s no barrier to entry in the crypto space, this competition will steadily eat away at the company’s margins. Lofty price target or not, Coinbase can be avoided by investors.
Baidu: Implied upside of 117%
One stock Wall Street appears to be consistently optimistic about is China-based internet search giant Baidu (NASDAQ:BIDU). The consensus price target has Baidu’s share price rising by 71% over the next year, with the most aggressive of the 41 analysts covering the company expecting an increase of 117% to over $390 a share.
The bullishness surrounding Baidu has to do with two factors. First, the company is benefiting from China’s coronavirus rebound. In the March-ended quarter, online marketing revenue from its leading internet search engine rose 27% from the prior-year period to approximately $2.48 billion. Over the past year, GlobalStats indicates that Baidu’s internet search share in China has ranged between 66% and 80% (i.e., it’s dominant).
The other factor is that Baidu has committed to growing its business by investing in…
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