For the past 13 months, investors have enjoyed a virtually uninterrupted super-rally from the bear market bottom set on March 23, 2020. Through late last week, the nearly 125-year-old Dow Jones Industrial Average, benchmark S&P 500, and technology-dependent Nasdaq Composite were higher by 83%, 86%, and 105%, respectively, since the bear market bottom.
But even with all three major indexes at or near all-time highs, Wall Street still sees value. Based on Wall Street's consensus price targets for publicly traded companies over the next 12 months, five stocks of various industries and sizes are expected to deliver gains for their shareholders ranging from 103% to as much as 146%.
Skillz: Implied upside of 103%
First up is mobile gaming and esports provider Skillz (SKLZ 2.71%), which went public via a special purpose acquisition company (SPAC) back in mid-December. Skillz closed on April 15 at $15.10 a share but has a consensus one-year price target by Wall Street professionals of $30.67. For you math-phobes at home, that's an implied upside of 103%.
Skillz is what you might call a disruptor in the gaming space. Rather than go toe to toe with highly competitive developers, it built a platform that allows gamers to compete against each other for cash and prizes. The kicker is that Skillz and gaming developers get to keep a percentage of the cash for hosting and innovation. Because Skillz is acting as the medium and not incurring extensive gaming development costs, the gross margin on the revenue it brings in is a cool 95%!
What should really excite investors is the company's potential with the National Football League (NFL). In early February, the two signed a multiyear agreement that'll see developers competing to launch NFL-themed games on the platform by late 2021 or early 2022. Football is the most popular sport in the U.S. by a mile, so this could be the perfect opportunity for Skillz to shine.
One last note: Wall Street is looking for the company's sales to quadruple between 2020 and 2024 to nearly $1 billion.
Intercept Pharmaceuticals: Implied upside of 103%
Embattled biotech stock Intercept Pharmaceuticals (ICPT) is another company analysts could see more than doubling over the next 12 months. With a consensus price target of $41.64, Intercept, like Skillz, offers an upside of up to 103%.
The future for the company rests with obeticholic acid (OCA), which is an experimental treatment for nonalcoholic steatohepatitis (NASH). NASH is a liver disease affecting up to 5% of the U.S. population. It can lead to fibrosis, cancer, and even death. NASH has no approved U.S. Food and Drug Administration (FDA) treatments but is an estimated $35 billion indication.
In the phase 3 Regenerate study, OCA met one of its two co-primary endpoints -- a statistically significant improvement in liver fibrosis without a worsening of NASH -- which was all that was needed to declare the study a success. However, Intercept was given a Complete Response Letter from the FDA regarding its new drug application filing, with the agency requesting additional safety data. It's worth noting that the highest dose (and most effective) led to considerably higher instances of pruritus (itching) and trial dropouts relative to the placebo.
Even if OCA was approved for a small subset of the sickest patients, it would have billion-dollar-plus potential.
Plug Power: Implied upside of 121%
Another stock analysts believe has big-time potential is hydrogen fuel-cell solutions provider Plug Power (PLUG 1.00%). If Wall Street's one-year price target of $57.53 proves accurate, it'll offer 121% upside to shareholders.
Through the first five weeks of 2021, Plug Power couldn't be stopped. Democrats' taking back of the Senate by the narrowest of margins in January appeared to pave the way for a clean-energy agenda, at least over the next two years. This was coupled with Plug Power announcing two joint ventures in January. First, it saw SK Group take a 10% equity stake in the company, with the duo expected to work on hydrogen fuel-cell solutions for South Korea. About a week later, Plug forged a joint venture with Renault that'll see the two going after the light commercial vehicle market in Europe.
On the other hand, the company also announced in mid-March that it would need to restate some financial statements and quarterly filings over the past four years. Even though these accounting errors had no impact on the company's cash position or its existing arrangements, they clearly spooked investors.
The big question is whether or not hydrogen fuel-cell technology hits the ground running in automobiles, or if it has a bumpy learning curve. The history of game-changing technologies suggests it could be the latter.
Vaxart: Implied upside of 145%
Wall Street also looks to be quite optimistic on small-cap biotech stock Vaxart (VXRT -3.15%) over the next year. The clinical-stage drug developer has a one-year price target of $13.33 from analysts, implying a whopping 145% upside.
Vaxart's possible claim to fame is the company's development of a COVID-19 vaccine. But unlike the other treatments on market or in development, Vaxart's experimental treatment (VXA-CoV2-1) is taken as a tablet. Tablets could dramatically quicken the immunization process, relative to having medical professionals put needles into people's arms multiple times.
In early February, the company reported positive phase 1 data involving VXA-CoV2-1. The vaccine reached its primary and second safety and immunogenicity endpoints, led to a potent immune response, and may offer protection against the original strain of COVID-19 and its now numerous variants. If this proves the case in later-stage studies, Vaxart's VXA-CoV2-1 may well represent the next generation of vaccines.
Of course, there's a long way to go before we know how effective Vaxart's oral solution is in large swaths of the population. As such, its future remains very much a dart throw until we receive more concrete mid-and-late-stage data.
Nikola: Implied upside of 146%
Finally, the stock Wall Street believes could offer the most implied upside over the next 12 months is electric vehicle (EV) manufacturer Nikola (NKLA -5.43%). With a one-year price target of $26.17, Nikola could gain as much as 146% over the next year, if analysts are correct.
Like Plug Power, Nikola has benefited from the expectation that Democrats will push a green-energy agenda. It's pretty much a foregone conclusion that EVs and alternative energy vehicles are the future of the automotive industry. It's simply a matter of carving up the pie to see who'll get a slice of what should be an enormous growth trend for decades.
However, Nikola has been nothing short of a disaster over the past six months. In no particular order, founder Trevor Milton stepped down, Nikola became the subject of a probe by the Securities and Exchange Commission, and the company's expected equity investment deal with General Motors fell through and resulted in a more toned-down partnership. Without GM to manufacture its electric and hydrogen fuel-cell Badger, the truck was shelved before it even rolled off the production line.
To make matters worse, Jesse Schneider, Nikola's executive vice president of technology, hydrogen, and fuel cells, reportedly left the company at the beginning of the month. With nothing tangible on U.S. roads and a lot of executive turnover, Wall Street's price target looks highly suspect.