Contrarian investors who like to zig when everyone else zags have a lot of shopping to do. The growth-stock-focused Nasdaq Composite index lost nearly one-third of its value last year.
Which beaten-down growth stocks have the best chance to soar once again? Investment bankers on Wall Street have some options for you to consider. The analysts following the stocks on this list think they could rise between 39% and 95% higher over the next 12 months.
Here's why they're so confident.
Amazon
Shares of Amazon (AMZN +2.17%) are down by about 47% from the peak they reached in 2021. At that time the company was on a hiring spree in order to meet record-breaking demand for fulfillment services. Unfortunately, the stock tanked when demand for e-commerce returned to normal and the company's bottom line fell into negative territory.
NASDAQ: AMZN
Key Data Points
Analysts who follow Amazon are expecting a rebound in 2023. The average price target on Wall Street suggests a gain of 39% ahead, once more investors see the stock in the same light they do.
Amazon's e-commerce infrastructure investments may have gotten a little too far ahead of themselves during the lockdown period of the pandemic but this is a temporary problem. The secular trend away from traditional retail and toward online shopping is a powerful tailwind that could return Amazon's e-commerce business to profitability in 2023.
Amazon's e-commerce business has been a drag on its bottom line, but not its business-to-business segment. Amazon Web Services delivered a $5.4 billion operating profit in the third quarter.
Lovesac
Lovesac (LOVE 3.47%) makes highly customizable sectional seating, which was in high demand during the lockdown period of the pandemic. Investors making this connection drove the stock through the roof at the time. Unfortunately, it's down about 71% from the peak it reached in 2021.
NASDAQ: LOVE
Key Data Points
Analysts who follow Lovesac closely think it could bounce back in 2023. The consensus price target on the stock represents a 95% premium.
Shares of Lovesac have been trading at just 11.3 times forward-looking earnings estimates. At this low valuation, investors will come out way ahead if the company creeps forward at a snail's pace.
Fear of a potential recession makes this a less-than-ideal time to sell high-end sofas, but that hasn't stopped Lovesac from reporting fairly rapid sales growth. Comparable sales during the fiscal third quarter that ended Oct. 30, 2022, rose 8.9% year over year.
InMode
InMode (INMD 0.69%) stock is down around 67% from the peak it reached in 2021. Analysts up and down Wall Street think it can rise again. The consensus price target now suggests it could climb about 54% in the year ahead.
NASDAQ: INMD
Key Data Points
This company develops and markets minimally invasive devices that cosmetic surgeons and other providers use to smooth out wrinkled skin. Its customer relationships don't end with sales of its workstations, though. The company also sells consumable goods that need to be replaced before each procedure.
The workstations InMode already has installed are performing a rapidly rising number of procedures. Third-quarter revenue from consumables and services rose 53% year over year.
InMode will report around $454 million in total revenue for 2022. That represents a 27% gain year over year.
Investors can reasonably expect many more years of rapid growth because InMode's patent-protected devices have just scraped the surface of their available market. Global spending on cosmetic surgery and procedures reached $63.4 billion in 2021, according to Grandview Research, and it's expected to grow by 9.6% annually through 2030.
With rapid growth and a powerful tailwind pushing it forward you might expect InMode stock to trade at a sky-high earnings multiple. This is not the case. Right now you can buy the stock for just 12.6 times forward-looking earnings estimates. Investors who buy the shares at this bargain price and hold them over the long run have an excellent chance to come out ahead.
