Soaring inflation and fear of rising interest rates aren't doing any favors for the stock market lately. For high-growth stocks tied to businesses that rely on cheap and plentiful capital to continue growing, the latest inflation numbers were particularly damaging.
Despite upsetting inflation data, investment bank analysts up and down Wall Street expect big gains ahead for these three stocks. The consensus price targets on these stocks at the moment are at least 51% above their recent closing prices.
Image source: Getty Images.
1. Inari Medical
Inari Medical (NARI -1.40%) shares are down around 36% from a peak they reached this spring. Analysts on Wall Street think it can rebound and reach new heights. The average price target for Inari Medical is around 51% above its recent price.
The past several months have been tough on shares of high-growth stocks in the healthcare sector. Extra appreciation for all things medical brought about by the pandemic has waned, but that isn't a reason to turn your back on Inari Medical.
This company's clot removal devices are a smash hit for hospitals. Patients presenting blood clots that jam up veinous circulation are often kept under observation for over a week while receiving blood thinners. Inari Medical's devices, FlowTriever for pulmonary embolisms and ClotTriever for deep vein thrombosis, do a better job in a much shorter time frame.
Inari Medical treated a record number of patients in the third quarter. Top-line revenue soared 15% compared to the second quarter and 88% year over year. The company even raised its full-year revenue guidance from a range between $250 million and $255 million up to a range between $266 million and $268 million.
Inari Medical thinks the total addressable market for its devices is up around $3.8 billion annually, and that's just in the U.S. It might not happen overnight, but a huge market to grow into and a lack of competition makes it a great stock to buy now.
Image source: Getty Images.
2. Marathon Digital Holdings
This has been a hyper-volatile year for Marathon Digital Holdings (MARA -3.00%) and its Bitcoin mining peers. The stock peaked this April, then fell more than 60% a few weeks later. Marathon Digital stock shot up to a new peak in November that didn't last long either. Now the stock is down around 52% from the all-time high it reached about a month ago.
Despite the stock's ups and downs, investment bank analysts who follow this Bitcoin mining business think its best days still lie ahead. The consensus price target for Marathon Digital represents a 73% premium over the stock's recent price.
The latest big tumble for Marathon Digital came in response to upsetting performance numbers from the month of November. Marathon Digital only mined 196 Bitcoins in November compared to 417 Bitcoins mined in October. It blamed maintenance and upgrades to its main facility for the disruption.
At the beginning of December, Marathon Digital had just 31,000 active miners, a figure that could rise over 300% in the first half of 2022. There's no telling what's going to happen to the value of the Bitcoins Marathon Digital is mining, but we can expect a lot more of them. So far this year, the company has entered agreements to purchase over 100,000 new miners and expects to have all of them up and running by the middle of 2022.
Image source: Getty Images.
3. Block
Block (SQ -0.59%) shares are down about 36% from a peak the stock reached in August. Wall Street analysts who follow the company formerly known as Square expect a rebound and some more gains ahead. The consensus target for Block represents a 64% premium over recent prices.
Block stock has been under a lot of pressure since its founder and CEO Jack Dorsey left his position at Twitter to become Block's full-time CEO. The name change reflects Dorsey's obsession with Bitcoin and decentralized finance.
Unfortunately, Block's plummeting stock price reflects the stock market's nervousness regarding the highly volatile nature of cryptocurrency valuations. Investors are also concerned that rising delinquencies and charge-offs affecting other buy-now-pay-later businesses could make it impossible for Block to realize a return on the recent $29 billion Afterpay acquisition.
Block's recent dip looks like an opportunity to buy a terrific business at a deep discount, but this stock isn't for the faint of heart. Despite dropping a long way, Block shares are still trading for more than 100 times forward earnings expectations.
Block's diverse yet intertwined collection of innovative businesses could help it grow into its nosebleed-inducing valuation over the long run. Just don't be surprised if there are more dips and dives along the way.
