In general, 2021 has been a good year for investors. Despite a global pandemic and supply chain problems, the S&P 500 has surged 28% since January, and the popular index currently sits near an all-time high. That being said, some Wall Street analysts still see plenty of upside for investors, especially in certain growth stocks.

For instance, Barclays currently has a price target of $345 on Upstart Holdings (UPST -4.81%), implying 116% upside. And RBC Capital has a price target of $215 on Teladoc Health (TDOC -3.94%), implying 130% upside. Of course, you should never base investment decisions solely on the opinion of one analyst -- but given the potential gains at stake, it's worth taking a closer look at both of these stocks.

Here's what you should know.

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Image source: Getty Images.

1. Upstart Holdings

Upstart is a fintech company that aims to improve the consumer lending industry. Rather than relying on antiquated credit models, Upstart uses artificial intelligence (AI) to quantify the risk of default. Specifically, the platform captures over 1,000 data points per borrower, and measures those variables against repayment events. In that way, its AI models improve each time a borrower makes or misses a payment.

Notably, internal studies have shown that Upstart's platform can reduce defaults by 75% while keeping approval rates constant. Alternatively, if loss rates are held constant, Upstart can boost approval rates by 173%. And that value proposition has translated into incredible sales growth.

Metric

Q3 2020 (TTM)

Q3 2021 (TTM)

Change

Revenue

$213.9 million

$620.7 million

190%

Data source: YCharts. TTM = trailing-12-months.

Last year, Upstart moved beyond the $81 billion personal loan industry, entering the $672 billion auto lending space. To accelerate that move,in April 2021 the company acquired Prodigy Software, an e-commerce platform that helps dealerships with vehicle discovery, credit applications, and consumer checkout. The company rebranded the product as Upstart Auto Retail, and it's already gaining traction. As of the third quarter, seven banks and 239 dealerships have signed up for auto lending on Upstart's platform.

However, the company's market opportunity may get even bigger down the road. Management has discussed entering the mortgage origination market, a $4.5 trillion industry. For perspective, Upstart powered $8.9 billion in loans over the past 12 months, approximately 1% of its current market opportunity and far less than 1% of its potential market opportunity.

From that perspective, I wouldn't be surprised to see Upstart's share price jump 115% over the next 12 months. More importantly, this stock looks like a smart long-term investment.

2. Teladoc Health

Teladoc reimagines healthcare. Its virtual-first platform allows patients to meet remotely with clinicians, making the experience less costly and more convenient. To differentiate itself, Teladoc has invested aggressively in expanding the scope of its services, and its portfolio now spans 450 sub-specialties, from general health and wellness to acute and chronic care.

Of particular note, last year Teladoc completed its acquisition of Livongo, a healthcare platform that leans on artificial intelligence to improve outcomes in chronic conditions like diabetes, hypertension, and weight management. That move not only extended Teladoc's portfolio, but it also created a source of potential synergy, as acute care physicians can now refer patients directly to chronic care programs.

As a whole, Teladoc is the most comprehensive telemedicine solution on the market, and from a financial perspective, that edge has translated into strong revenue growth.

Metric

Q3 2020 (TTM)

Q3 2021 (TTM)

Change

Revenue

$867.1 million

$1.9 billion

115%

Data source: YCharts. TTM = trailing-12-months.

Unfortunately, Teladoc's membership growth has slowed substantially in the wake of the pandemic. During the most recent quarter, U.S. paid memberships rose just 2% to 52.5 million. Investors need to monitor this metric closely. Some deceleration is natural, but if Teladoc fails to reaccelerate membership growth, the company could be in trouble.

That being said, management is making smart moves. In October, Teladoc launched Primary360, a virtual-first primary care solution that pairs patients with a dedicated physician. That service reinforces synergies created by Teladoc's broad portfolio, adding another touchpoint at which physicians can refer patients to chronic care programs or specialists like mental health professionals.

On that note, Teladoc launched myStrength Complete in the second quarter, a mental health service that includes clinicians and in-app tools that help patients manage stress, depression, and other mental health conditions. Also noteworthy: Teladoc has seen promising growth in its chronic care programs, as the number of enrollees jumped 31% to 725,000 in the most recent quarter, and the number of patients enrolled in more than one chronic care program tripled.

All things considered, it's not hard to imagine Teladoc's share price rising 130% over the next 12 months, especially if the company can onboard new members more quickly.