2 Growth Stocks That Doubled in 2023 and Could Shoot 55% to 87% Higher, According to Wall Street

Investors looking for growth stocks that can make dramatic moves in a short time should look more closely at healthcare. Two stocks in this sector have already doubled this year and could climb much higher.

Viking Therapeutics (VKTX 0.22%) and Nano-X Imaging (NNOX -2.36%) are each up more than 100% this year, and analysts on Wall Street think they have a lot more fuel in the tank. The average price targets on these two stocks suggest they can climb as much as 55% and 87%, respectively, over the next 12 months. 

It costs investment banks nothing to change the price targets they issue. This makes it a bad idea to buy stocks simply because analysts have high expectations, but that doesn't mean you should ignore their recommendations. Here's what you should know before making a decision to buy, sell, or hold these stocks.

Viking Therapeutics

Shares of Viking Therapeutics are already up about 127% this year in anticipation of a blockbuster drug launch in the not-so-distant future. Analysts are encouraged by recent clinical trial results for Viking's experimental treatment for non-alcoholic steatohepatitis, or NASH.

Around 24% of American adults have non-alcoholic fatty liver disease (NAFLD), and a majority don't even know it. For somewhere between 1.5% and 6.5% of American adults, though, their NAFLD progresses to NASH, which means their immune system continuously attacks their liver. The inflammation causes swelling and, in many cases, scarring or cirrhosis.

In a study with 248 NASH patients, treatment with Viking's lead candidate, VK2809, dramatically lowered liver-fat concentrations after 12 weeks of treatment. The phase 2 trial tried four dosage strengths, and even the lowest dose led to liver-fat reduction of 30% or better for a majority of patients.

The liver-fat reductions seen with VK2809 after 12 weeks look competitive with a similar candidate under development by Madrigal Pharmaceuticals (MDGL -6.29%) called resmetirom. Regulators at the Food and Drug Administration (FDA) are more concerned with their ability to safely reduce inflammation and cirrhosis.

Viking's stock could soar, but it's super risky. The company has a $2.1 billion market cap even though it will be at least a couple of years before its lead candidate gets a chance to generate any revenue. The company finished March with $136 million in cash after burning through $19 million during the first three months of the year.

We won't find out until next year if VK2809's NASH resolution scores stand up to resmetirom's impressive performance. It's probably best to tread lightly around Viking Therapeutics until its future is a little more certain.

Nano-X

On May 1, Nano-X stock spiked after the company announced that the FDA had granted clearance to market its new lead product, a three-dimensional image-generating device called Nanox.ARC and the cloud-based software for managing and interpreting the 3D images it produces.

Nanox.ARC employs proprietary X-ray producing chips that run at low temperatures and use relatively little electricity. This is a massive improvement over traditional X-ray sources, which still rely on heating a metal filament past 2,000 degrees Celsius.

Getting frequent images of your internal organs is a great way to prevent more-expensive interventions later. Due to the enormous expense, though, most of us never get one until something has already gone wrong.

Maintaining X-ray bulbs is so expensive that Medicare regularly pays imaging facilities over $1,000 to produce a 3D image of internal organs with a traditional CT scanner. Nano-X's business model is based on a total cost of $40 per scan, which is a fraction of Medicare patients' out-of-pocket cost when they get a CT scan.

But before you fill your portfolio with Nano-X stock in the hope it will revolutionize medical imaging, you should know that new medical-device launches from start-ups like Nano-X are often unpredictable. Its current market cap of about $965 million could come crashing down if the company doesn't report surging sales of the Nanox.ARC system by the end of the year.