Are you in the market for stocks that could double your money in another year or so? Analysts working at Wall Street investment banks have some stocks in mind that have fallen on hard times but still have a chance to succeed.
Read on to see which stocks are poised to more than double in value based on consensus estimates from the investment bank professionals who get paid to follow them.
Image source: Getty Images.
Ginkgo Bioworks
Ginkgo Bioworks (DNA 6.40%) and its mission to do fun stuff with DNA excited early investors in 2021. Unfortunately, the company manages custom-built organisms much better than it handles its cash flows. Heavy losses since going public sent investors running for the hills and now the stock is 94% below its peak in 2021.
Wall Street analysts think Ginkgo Bioworks can begin a strong comeback. The stock's consensus price target right now represents a 169% premium over its current price.
NYSE: DNA
Key Data Points
The first thing investors should understand about Ginkgo Bioworks is that it's a risky long-term bet. This biotechnology company designs new microorganisms for other businesses, such as SYNB2081. This is a candidate for the treatment of gout that Ginkgo Bioworks developed in partnership with Synlogic. Ginkgo owns shares of Synlogic and will benefit a great deal if SYNB2081 succeeds in clinical trials, but this is far from guaranteed.
While investors wait for some of Ginkgo's ships to come in, its balance sheet is bleeding money. The company's infectious disease testing segment produced some operating income but the microorganism designing business lost about $107.6 million in the first half of 2022. A disturbing $1.26 billion in stock-based compensation brought the company's loss in the first half to a stunning $1.3 billion.
Ginkgo Bioworks's microorganism foundry business is interesting, but I'd wait for some signs that it can achieve profitability before risking any hard-earned money on this stock.
Amyris
Amyris (AMRS +0.00%) is another synthetic biology stock that has seen better days. The stock has lost about 86% since hitting a peak in early 2021. Wall Street analysts think it can bounce back. The average price target for Amyris represents a 187% gain if it meets expectations.
OTC: AMRS
Key Data Points
Like Ginkgo Bioworks, Amyris develops custom microorganisms for third parties. Amyris is a very different company, though, because it's also its own biggest customer. Biossance and JVN Hair are relatively popular consumer health and beauty brands wholly owned by Amyris.
Ginkgo essentially leaves manufacturing up to its partners but Amyris recently started manufacturing its products in a new purpose-built facility. Amyris lost a disappointing $217 million in the first half, but the company's first manufacturing facility in Barra Bonita, Brazil, didn't start fermenting products until late June.
Amyris has shown us it can build successful health and beauty brands. Consumer sales soared 113% higher year over year in the first half of 2021. Before making big bets on the stock, it's probably a good idea to wait for signs the new manufacturing plant can improve margins and allow the company to produce a sustainable profit.
Lovesac
Lovesac (LOVE +0.79%) is a stock that soared when it seemed like we'd never leave our living rooms. Now that Americans are buying a little less furniture, though, shares of the sofa manufacturer have come under pressure. The stock is down more than 60% from the peak it reached last year.
NASDAQ: LOVE
Key Data Points
Analysts on Wall Street who follow Lovesac think the stock can go much higher. The consensus price target for Lovesac represents a 173% premium over its recent price.
I'm relatively confident about Lovesac meeting analyst expectations because the company has proven it can grow quickly while posting a sustainable profit. Despite investing heavily to accommodate soaring demand in early 2021 the company is generating a sustainable profit. Demand for high-end furniture has subsided since early 2021 but Lovesac reported adjusted fiscal first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) that rose 19.5% year over year.
The company's main products are highly configurable sectional sofas the company calls Sactionals. Lovesac builds a lot of Sactionals that its customers can update and upgrade indefinitely. Customer loyalty and economies of scale could allow for rapidly increasing profits in the years ahead.
Stocks with lofty price targets almost always come with big risks. There are no guarantees that Lovesac's bottom line will continue rising but successful execution so far makes this one seem like a relatively safe bet.
