Investors looking for big gains in a beaten-down market have quite a few excellent options to choose from at the moment. With inflation, rising interest rates, and fear of a recession weighing on investors' minds, even the best stocks have been in freefall.
Investment bank analysts on Wall Street have identified a handful of top growth stocks that have a lot more potential than their present market values would suggest. In fact, all three of these stocks could double your money or better if they meet consensus expectations.
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Exact Sciences
Shares of Exact Sciences (EXAS 2.38%) soared in 2020 and 2021 thanks to exploding demand for its COVID-19 diagnostics. Now that demand for infectious disease testing has subsided, the stock is 79% below the peak it reached in 2021.
Wall Street analysts who follow Exact Sciences think its best days are still to come. The average price target on the stock suggests a 117% gain could be up ahead.
The analysts who follow Exact Sciences are particularly encouraged by the company's durable position in the market for non-invasive colon cancer screening. Exact Sciences is the company behind the Cologuard test. This year it expects cancer screening revenue to climb 28% year over year to about $1.36 billion, at the midpoint of the guided range management provided in August.
Steadily rising Cologuard revenues are allowing the company to race forward with more lucrative opportunities that include a multi-cancer early detection testing program. At a recent conference for oncologists, Exact Sciences showed that its multi-biomarker approach achieved 61% sensitivity and 98.2% specificity in a study with over 600 samples. In other words, it might put out some false negatives, but it rarely produces any false positives. This is exactly what you want to see from a test that could be used to screen millions of healthy people each year.
Ginkgo Bioworks
Shares of Ginkgo Bioworks (DNA -2.56%) soared following its market debut last year. Unfortunately, a market with very little patience for growth stocks has knocked it down 81% from its peak.
Ginkgo Bioworks is a synthetic biology company that makes custom microorganisms for a growing list of clients. For example, the company's proprietary cell programming platform generated an experimental gout treatment for a partner called Synlogic this summer. Since Ginkgo's also acquired a stake in Synlogic, it could reap big gains if the drug eventually earns approval.
Analysts who follow Ginkgo Bioworks and its industry closely think it can recover some of its recent losses. The average price target on the stock represents a 167% premium. Before you follow their advice, though, you should know just how risky this stock is.
Some of the drug candidates Ginkgo developed for its partners are in early clinical trials, but they're all years away from beginning the new drug application process. Unfortunately, time is not on this company's side. In the first half of 2022, Ginkgo lost a frightening $1.3 billion.
Sea Limited
Sea Limited (SE 7.94%) is another stock that soared in the early days of the pandemic only to fall apart in 2022. Shares of this Southeast Asian conglomerate are down 85% from the peak they reached in early 2021.
Analysts up and down Wall Street expect better days ahead for Sea Limited's gaming and e-commerce operations. The consensus price target on the stock represents a 99.2% gain over its recent price.
Sea generates profits with Free Fire, the online game most downloaded to mobile devices for the past several years. Unfortunately for Sea, the government of India banned the app and dozens of others earlier this year, citing security concerns.
Sea uses all the profits its gaming division generates and more to grow an e-commerce business that isn't able to stand on its own yet. Its e-commerce operation, Shopee, is already the most popular e-commerce application on smartphones throughout Southeast Asia and Taiwan.
Unfortunately, Shopee is still losing some money on orders in its established regions, and it lost a whopping $1.42 per order in Brazil during the second quarter. E-commerce issues pushed its overall loss in the first half of 2022 to a stunning $1.5 billion. It's probably a good idea to wait for Sea to quit bleeding money before taking a chance on this risky growth stock.
