A company's stock price isn't an indication of its worth -- that's more a function of its market capitalization. But a company's share price can determine how accessible it is to investors, especially to beginners, or those deploying small amounts of investment capital.
Take Amazon, for example. It would cost about $2,912 to buy a single share in that company at the moment, and while many brokers offer fractional shares, they're not available everywhere, and some investors simply have a preference to own whole shares. It's one reason companies like Apple, and more recently, Alphabet, reduce their share prices via stock splits.
But some stocks don't have that issue. Here are three you can buy right now for under $30 a share. As an added bonus, Wall Street thinks each of these growth stocks could soar.
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1. GoPro
GoPro (GPRO -2.86%) is the longtime leader of the action-camera industry, garnering popularity from extreme sports enthusiasts and everyday adventure seekers alike. The company was first listed on the public markets in 2014, reaching an all-time high stock price of $93.85 before enduring a lengthy 92% decline to the $7.66 it trades at today.
Investors were concerned about GoPro's stagnant growth rate related to a one-dimensional business model, making and selling cameras. But the company has turned things around dramatically, adding brand-new revenue streams, including a booming subscription business. Approximately 1.6 million brand loyalists had become GoPro.com subscribers by the end of 2021, more than double the number at the end of 2020, each paying a yearly recurring fee of $49.99 for exclusive benefits.
GoPro has also changed the way it sells its core products. Rather than relying on large retailers to sell cameras, it's leveraging its website to sell direct-to-consumer, and that channel now accounts for 34% of total sales. Cutting out retailers means a greater share of the profit from each sale lands in the pockets of GoPro shareholders.
Wall Street is on board with the improvements, especially one of the largest investment banks in the world, JPMorgan Chase, whose analysts think GoPro could soar to $15 per share. That represents 96% upside from the current price, but given the changes in the company's business model, that could be conservative in the long run.
2. Lemonade
Nobody likes dealing with their insurance company, and in the digital age where consumers value convenience and speedy service over most other things, the industry as a whole often comes up short. Those are among the issues Lemonade (LMND 0.83%) is trying to solve, and it has become a worthy challenger to its entrenched competitors.
In fact, its website openly tells visitors that 19% of its customers migrated to Lemonade from insurance giant Allstate, and that's just one example. The driving force behind Lemonade's growing popularity is Maya, the company's artificial intelligence-powered wonder-bot, that can pay customer claims in under three minutes and quote an insurance policy in 90 seconds -- often without any human input.
But as with any disruptor, Lemonade has faced challenges. It's still scaling up the business, which involves introducing new products like its recent car insurance addition, but this tends to cause volatility in the company's gross-loss ratio, which is a measure of claims compared to gross earned premiums. The result has been substantial losses at the bottom line, including over $246 million in 2021.
Investing in Lemonade stock, therefore, carries risks, but over time things are expected to improve. It has won the business of more than 1.4 million customers, after all, and the consensus on Wall Street is that its stock could rise 129% to $44.13. But analyst firm JMP Securities is far more bullish with a $95 price target, implying an upside of 393% from today's price of $19.27 a share.
Image source: Getty Images.
3. Redfin
Selling a home is something most people do just a few times in their lives. It can be an overwhelming experience, which is why using a real estate broker to manage the process is so important. While most brokers work within small firms focused on a specific geographic area, Redfin (RDFN -2.07%) has built a workforce of thousands of them covering swathes of the U.S.
The benefit of such enormous scale is the company's ability to charge a smaller listing fee (as low as 1%) compared to the broad industry average of around 2.5%. Redfin boasts that it has saved sellers over $1 billion since it entered the market, and since clients are flocking to use its services, it appears to be a win-win arrangement for all parties. In fact, Redfin was used in the sale of 1.16% of all homes sold across America in 2021.
The company also operates an iBuying segment, where it purchases homes directly from sellers and flips them for a profit. It's a risky business, and its key competitor Zillow Group recently exited this area after sustaining major losses. Exposure to this risk is one reason investors have turned cold on Redfin's stock, sending it 31% lower in the last month alone; however, it's important to keep in mind that broking is still the company's main business.
Right now there's no sign that Redfin will suffer a similar fate to Zillow, and analysts predict the company will generate over $2.6 billion in revenue in 2022, representing a healthy 39% growth rate compared to 2021. But there are significant risks on the horizon with interest rates likely heading higher, which could put a damper on the real estate market.
That being said, the consensus price target for Redfin stock on Wall Street is $47.25, which is 152% higher than where it trades at the moment. But Truist Securities thinks it could soar by a whopping 370% to $88.
