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%.
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Netflix: Implied upside of 115%
The unquestioned biggest name on this list is streaming kingpin Netflix (NFLX 1.74%). 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.
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Coinbase Global: Implied upside of 156%
Cryptocurrency brokerage and ecosystem Coinbase Global (COIN -0.34%) 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.
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Baidu: Implied upside of 117%
One stock Wall Street appears to be consistently optimistic about is China-based internet search giant Baidu (BIDU 0.72%). 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 artificial intelligence (AI) and cloud services. Although these ancillary operations represented only 21% of total sales in Q1 2021, AI and cloud services revenue rocketed 70% higher year-over-year.
The bottom line is that Baidu is an inexpensive cash cow. While it may not be able to achieve a 117% return over the next 12 months, it does look incredibly attractive for long-term investors.
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Trulieve Cannabis: Implied upside of 177%
Wall Street is also very bullish on most U.S. marijuana stocks. Potentially topping the list is U.S. multistate operator (MSOs) Trulieve Cannabis (TCNNF -6.26%). If the loftiest price target from Wall Street proves accurate, shareholders could net a jaw-dropping 177% return over the next year.
The most interesting aspect of Trulieve Cannabis is the company's growth strategy. Whereas most MSOs are planting their proverbial flags in as many legalized states as possible, Trulieve has opened 85 of its 91 operational dispensaries in medical marijuana-legal Florida. By focusing virtually all of its efforts on a single large state, Trulieve has been able to keep its marketing costs down and it's gobbled up roughly half the Sunshine State's dried cannabis and oils share. It's also reported 13 consecutive profitable quarters.
What's more, Trulieve is in the midst of acquiring MSO Harvest Health and Recreation (HRVSF) in an all-stock deal valued at $2.1 billion, when announced. Harvest Health has a five-state focus, one of which happens to be Florida. The crown jewel of this deal is the 15 stores Trulieve will inherit in Arizona -- a state that legalized recreational cannabis in November. Trulieve shouldn't have any issue putting its successful blueprint to work in the Arizona market.
As with Baidu, hitting the peak price target may be asking too much. But upside certainly appears warranted given its history of profitability.
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Plug Power: Implied upside of 165%
Rounding out the list is one of the hottest alternative energy stocks of 2021, Plug Power (PLUG -1.25%). If analyst Amit Dayal of H.C. Wainwright is correct, and Plug rallies to $78 over the next 12 months, shareholders will enjoy a 165% appreciation.
Plug Power has both macro and company-specific catalysts in its sails. From a macro perspective, it's benefiting from the U.S. and global effort to fight climate change. As a manufacturer of hydrogen fuel-cell solutions, Plug has the potential to put its technology to work in automobiles, enterprise machinery, and hydrogen refilling stations around the world.
More specific to the company, Plug Power landed two major joint ventures in January. It received a $1.6 billion equity investment from SK Group, and will be working with SK Group to bring hydrogen fuel-cell-powered vehicles and refilling stations to South Korea. It also formed a joint venture with French automaker Renault (known as Hyvia), with the duo targeting the light commercial vehicle market in Europe.
There's no question that Plug Power is going to deliver some serious revenue growth over the coming years. However, with the company already worth $17 billion and not close to profitability yet, it might be wise to take a wait-and-see approach.
