5 High-Growth Stocks With Potential Upside Between 62% - 144%

For years now, growth stocks have been going on strong. A combination of historically low lending rates, ongoing bond purchases by the central bank, and now big spending from the capital has allowed fast-growing companies the space to thrive.

Based on the highest price target estimate for each of the following five growth stocks, Wall Street expects an upside ranging from 62% to as high as 144% over the coming year.

Below is a list of 5 high-growth stock with their projected upsides.

1. NIO: Implied upside of 104%

NYSE: NIO

Stock Price: $53.37

Market Cap: $87.45 Billion

Electric-vehicle manufacturer NIO is the first high-growth stock on the list. Even though NIO is getting near to the mean consensus price target, analysts expect the company to hit $92 a share. This is about two times more than it currently is.

The bullishness around NIO stock likely has to do with the company's location and its ability to scale production. Considering that China is the largest auto market in the world and by 2035, it is projected that half of all vehicles sold will be powered by some form of alternative energy - 95% of which will be electric cars. Since the EV market is still new in China, there is opportunity for NIO to become a major player.

NIO has also done an excellent job of improving production in the past year. Although output is currently held back by a global chip shortage, the company is on track to deliver between 21,000 and 22,000 EVs in the second quarter.  

With NIO sitting on a large cash pile and introducing a high-margin battery subscription service last year, their share price seems very likely to rise.

2. Teladoc Health: Implied upside of 82%

TDOC

Stock Price: $166.50

Market Cap: $25.73

If the price target on Wall Street proves accurate, leading tele-health platform Teladoc Health will offer a generous upside.

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.

With the coronavirus, virtual visits to physicians went up to almost 10.6 million from 4.14 million in 2019. Teladoc grew its sales by an annual average of 74% in the six years leading up to the pandemic, demonstrating that the company was doing well even before the pandemic hit.

While telehealth can't always replace in-office visits, virtual appointments are substantially more convenient for patients, and they provide doctors with better tools to keep track of key health metrics for chronically ill patients. In short, telehealth is a ticket to improved health outcomes, which means less money from insurers.

Teladoc also bought applied health signals company Livongo Health in the fourth quarter of 2020. Livongo works with artificial intelligence to send tips and alerts to chronically ill patients to help them lead healthier lives. So far, it already has signed up 658,000 diabetes members. From all indications, the upside is feasible.

3. Skillz: Implied upside of 66%

SKLZ

Share Price: $21.74 

Market Cap: $8.62 Billion

The third big-time growth stock with a large implied upside is gaming and Esports platform Skillz. If Wall Street's high price target of $34 happens, Skillz will deliver gains of 66% to its shareholders.

While the gaming industry is highly competitive, Skillz chose to focus on gamers not developers. The company built a platform that allows gamers to compete for cash prizes, and in turn, Skillz and the game developers in question get to keep a percentage of the cash prizes. By using this tactic, Skillz has reduced the operating risk of its platform while increasing its gross margin to 95%.

Even though costs are moving higher as headcount and marketing increase, the future looks intriguing. In particular, Skillz signed a multiyear agreement with the National Football League (NFL) in early February. This agreement will allow NFL-themed games operate on its platform by 2022.

Skillz already records 17% of its monthly active users are paying to play, which is over eight times higher than the industry average. If this trend keeps up, sales could triple by 2024, making the $34 price target seem potentially achievable in the next year.

4. Sarepta Therapeutics: Implied upside of 144%

SRPT

Stock Price: $77.40

Market Cap: $6.18 Billion

Specialty biotech Sarepta Therapeutics has the potential to be one of the biggest stocks over the coming year, but a lot will depend on its pipeline. Based on the highest Wall Street price target of $196, Sarepta could see up to 144% upside over the next year.

The company's success is tied to its trio of U.S. Food and Drug Administration-approved drugs to treat Duchenne muscular dystrophy (DMD) - a disease diagnosed in children that's characterized by the degradation of muscle tissue over time. 

The big issue for Sarepta is currently whether or not its experimental drug candidate SRP-9001 becomes a savior. SRP-9001 utilizes an adeno-associated virus to deliver a gene directly to muscle tissue and encourage the production of micro-dystrophin. Also, it moves beyond the gene-specific nature of Sarepta's therapies and would be applied to a greater number of DMD patients.

In January, Sarepta's share price dropped after the first part of Study 102 showed SRP-9001 led to improved North Star Ambulatory Assessment total scores, although the improvement wasn't statistically significant. It then partially redeemed itself in May with positive early trial results from the open-label Endeavor study. Currently, Wall Street analysts are waiting to see how far it goes.

5. Amazon: Implied upside of 62%

AMZN

Stock Price: $3,467.23 

Market Cap: $1.75 Trillion

Last on the list is e-commerce giant Amazon. According to the Wall Street-high price target of $5,500, the company could deliver up to a 62% gain over the next year. This would mean an added $1.06 trillion to Amazon's already mammoth $1.72 trillion market capitalization.

A reason for this projected upside is Amazon's indomitable market share advantage in U.S. online retail sales. In 2021, it'll control approximately $0.40 of every $1 spent online, based on a report from eMarketer. That's more than five times higher than its closest competitor. This dominance has led the company to sign up over 200 million Prime members worldwide.

However, the bigger growth driver looks to be Amazon Web Services. The web service holds about one-third of infrastructure cloud services market share. Despite cloud accounting for only one-eighth of Amazon's total sales, the higher margins associated with the services have it generating about 60% of its operating income. Between 2020 and 2025, it is possible to witness Amazon's operating cash flow triple as a result of the web service.