If you're looking for stocks that could make big moves to the upside in a relatively short amount of time, there are more than a few options available. Record-breaking inflation levels, rising interest rates, and fear of a recession on the horizon are all weighing down stock prices right now.
At times like these, shares of the best businesses can get pushed way down despite strong fundamental reasons to expect success. Investment bank analysts on Wall Street who follow these three stocks think they've been beaten down way too far. In fact, consensus price targets on these stocks suggest they could climb between 62.6% to 66.3% once the rest of the market sees their underlying businesses in the same light as Wall Street does.
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Moderna
In 2021, Moderna (MRNA 0.89%) was more highly valued than all but a handful of big pharma companies. It's fallen around 47% this year, but investment bank analysts up and down Wall Street think this coronavirus vaccine maker can mount a recovery. The average price target on Moderna right now represents a 62.6% premium over recent prices.
Moderna has been funneling profits from its COVID-19 vaccine into an exploding array of new vaccine programs, and analysts are encouraged by the progress so far. In September, the company had 24 vaccine programs in clinical trials, up from just eight clinical-stage programs in 2019.
Four of Moderna's vaccine programs are in late-stage testing. Two of its late-stage candidates are aimed at troublesome infectious diseases that still lack effective vaccines, cytomegalovirus (CMV) and respiratory syncytial virus (RSV). Moderna's messenger-RNA-based approach produced a coronavirus vaccine that arguably outperforms those that use a more traditional technique. This bodes well for the company's attempts to be the first to prevent CMV and RSV.
DigitalOcean
DigitalOcean (DOCN 0.95%) was a stock market darling in 2021. This year has been a different story, with the stock down around 58%.
Analysts on Wall Street think the beatdown DigitalOcean received this year went too far. The average price target on this stock is about 64.8% above its most recent closing price.
DigitalOcean offers lone-wolf developers and smaller teams access to cloud computing services at a steep discount to the big three providers, Amazon, Microsoft, and Alphabet. Investment bank analysts are bullish about DigitalOcean because its user base is growing with the company. The average revenue per customer soared 24% year over year to $71.76 in the second quarter.
A net dollar retention rate that has remained above 100% for more than two years suggests its clients aren't migrating to larger cloud service providers. As the go-to cloud service provider for smaller clients, I won't be surprised if this stock soars way past its price targets over the long run.
Doximity
Shares of Doximity (DOCS -2.73%) surged in 2021, but the stock has tanked by about 52% this year. Investment bank analysts who get paid to follow this social media platform for healthcare professionals think it can bounce back. The average price target on the stock is 66.3% higher than its recent closing price.
Doximity's social media feed is curated for physicians, nurse practitioners, and physician assistants, but it doesn't allow them to upload their own posts in an attempt to go viral. Instead, Doximity drives engagement by offering physicians valuable tools like the Doximity Dialer.
Doximity Dialer allows care providers to use their office phone number when calling patients from their personal devices. During the company's fiscal first quarter ended June 30, providers used Dialer around 200,000 times per day, on average, to contact patients.
Providing a social media feed and tools like Dialer isn't a big stretch for Doximity, so its operation is highly profitable. Despite still being in the early chapters of its growth story, free cash flow in its fiscal first quarter came in at an impressive 47% of total revenue. With a highly profitable business that still has room to grow, Doximity stock could supercharge your portfolio.
