Growth stocks haven't had the kind of year in 2021 that investors would've wanted, but that's also where the best opportunities lie. If you can find stocks with underlying growth catalysts as strong as ever, they should be the first to not just rebound but to also outrun the market once macroeconomic fears are allayed. Here are three such growth stocks that are screaming buys for 2022.
How omicron could send this stock surging
Teladoc Health (TDOC 3.31%) stunned the market in 2020 when its shares more than doubled. One year later, the telehealth stock has slumped 52%. Ironically, Teladoc continues to grow rapidly, and that's exactly what should light a fire under the stock again.
In its third quarter, for example, revenue surged 81% year over year as patient visits on its platform rose 37%. From primary care to chronic disease management, Teladoc Health offers a wide spectrum of virtual healthcare services and is already the world's largest telehealth company.
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Teladoc expects its revenue to cross $2 billion in 2021, which would mean solid 80%-plus growth over 2020.
As for 2022, there are two big catalysts. First, large health insurers like CVS Health's Aetna are all set to launch Teladoc's services in 2022, which should help hugely expand the latter's reach and visibility.
Second, the omicron variant seems like a legit threat to trigger yet another phase of lockdowns. Even if economies don't shut down, more people will likely be vigilant and choose to avail themselves of essential services at home, rather than step outside in the coming months. Telehealth is foremost among such services, which means that as long as the pandemic continues, sales should keep growing. All of that growth should be reflected in its stock price.
The boom times have only just started
The shares of Upstart Holdings (UPST 3.90%) are set to end 2021 on a solid note despite their drop in price in the past couple of months. That drop doesn't mean its good days are over. On the contrary, Upstart's growth may have just started.
In its third quarter, the company reported a 250% and 201% jump in revenue and net income, respectively. It earned $29.1 million in net income on revenue worth $228 million. You don't always get to see a company in the early stages of growth turn a profit. Upstart's lending platform, driven by artificial intelligence, is clearly turning heads, primarily because it screens borrowers based on data points derived from loans to more than a million people. That helps lower risk for lenders and helps borrowers with quick, low-rate loan approvals.
I see Upstart's revenue hitting $1 billion in 2022, which is huge for a stock that made its public debut just about a year ago. The real growth catalyst is the multibillion-dollar U.S. auto loan market, where the company is only just getting started after having established itself in the personal loan space. The growth potential is humongous, which means Upstart's sales should continue to boom. So should its stock price.
An incredible stock in a high-voltage growth industry
2021 has been a thrilling year for investors in electric vehicle (EV) stocks, chock-full of hyped debuts, dizzying valuations, and all the drama you'd seek in an industry that's changing the dynamics of the auto sector. One EV stock that's caught everyone's attention is Nio (NIO 0.25%), the Chinese EV manufacturer that wants to overtake Tesla in its home market.
Although Nio shares have lost a whopping 43% in the past six months (as of the time of this writing), given the catalysts ahead for Nio, this is one heck of a growth stock I'd consider now.
Just for now, here's what the automaker has lined up for 2022: the delivery of its flagship sedan, the ET7, beginning in March; delivering the midsize ET5 sedan, its Tesla Model 3 competitor, in September, and entry into at least three new European countries. In between, Nio is reportedly in talks for a partnership with China's largest seller of new-energy vehicles, BYD.
By Jan. 20, investors should know the number of ET7 orders Nio has secured. Between January 2021 and November 2021, it delivered 80,940 units across its three SUVs, up 120% year over year. While the ET7 looks promising, the ET5 could be a game changer. And if Nio enters the U.S. market in between, as rumored, or goes for a dual listing in Hong Kong, the sky could be the limit for its shares.
