Investors are always on the lookout for stocks at bargain prices. The thrill of identifying an undervalued asset, purchasing and watching it appreciate in value is as applicable to the stock market as any other market.
Bargain stocks offer a lot aside from the thrill of the hunt. Since the price is already low, there’s less room for bargain stocks to fall compared to a stock trading at a high valuation. Such shares can sometimes be companies with strong fundamentals that are temporarily out of favor with the market. By investing early, you’re potentially getting on board with a company poised for long-term growth.
All of the stocks discussed in this article have the potential to provide returns above 50% based on analysts’ targets. Of course, there’s no guarantee that undervalued bargain stocks depreciate in price. stagnation and declines are possibilities. Nevertheless, these stocks have more upside than downside and can provide 50% returns in a year.
Grab Holdings (GRAB)
Poised for a breakout, Grab Holdings (NASDAQ:GRAB) is a company that continues to grow rapidly on the top line while simultaneously approaching net profitability.
The company’s most recent financial statements paint a positive picture overall. The company continues to rapidly improve its operating losses leading management to adjust guidance upward. Top line growth near 25%, rapidly narrowing losses and increased guidance create a strong combination suggestive of upward momentum.
Grab Holdings is a ride share super app serving a Southeast Asia region that is growing rapidly. GDP in the region is expected to increase by 4.6% in 2024. It’s part taxi, part food delivery app and part delivery of everything else.
The region it serves is characterized by favorable demographics as well as massive opportunities due to shifting global supply chains. Those factors supercharge the potential of companies including Grab Holdings.
The firm could reach net profitability this year and has the potential to double in price based on analyst target prices.
Celsius Holdings (CELH)
Currently, Celsius Holdings (NASDAQ:CELH) is either a real bargain stock or a value trap. That’s the puzzle investors continue to try to figure out in the wake of the stock’s tumultuous performance this year. Share prices have gone from $60 to $95 back to $70, then up to $95 again only to fall yet once more back to $46.37. The price chart visually exemplifies the roller coaster ride shareholders have taken with CELH in 2024.
Celsius Holdings has undergone a torrid period of growth. In 2019, the company reported just over $75 million in revenues. By 2023, that figure had multiplied to $1.32 billion. Per share earnings multiplied in the process and Celsius Holdings was suddenly the ‘it’ energy drink.
The company partnered with Pepsi (NYSE:PEP) giving it a similar distribution network to that Monster Beverage (NASDAQ:MNST) enjoys with Coca-Cola (NYSE:KO).
Renewed concerns over a weak consumer sent Celsius Holdings plummeting of late. Top-line growth of 23% is expected in Q2 which is reason to take a bullish position. Annual revenue growth is expected to be even higher.
Unity Software (U)
Unity Software (NYSE:U) currently trades near its low target price assigned by analysts with coverage of the stock. It will provide 100% returns if it reaches its consensus target price in the next 12 months. The best case scenario is that the 3D content platform quadruples within that time frame.
As impressive as those potential returns are, Unity Software has been going through some real troubles. Revenues fell by 8% in the first quarter. Some analysts are concerned that the poor execution to begin the year puts the company’s annual targets in jeopardy. Notably, the company switched Chief Executive Officers recently.
So, Unity Software is arguably at a low point, and given its strong partnership with Apple (NASDAQ:AAPL), there is reason for bullishness. Unity Holdings announced support for Apple’s Vision Pro headset and its operating system, visionOS. Apple recently announced its Apple Intelligence generative AI platform geared toward the iPhone. Although I can’t find any evidence of an early partnership, U’s 3D graphical strengths could be leveraged to further develop the already existing relationship between the two.
Snowflake (SNOW)
Snowflake (NASDAQ:SNOW) is another embattled stock that very well may be in bargain territory at the moment.
One of the more important narratives surrounding Snowflake is artificial intelligence (AI). The company simultaneously benefits and suffers from AI currently.
“Our AI products are generating strong customer interest,” noted recently appointed CEO Sridhar Ramaswamy. “They will help our customers deliver effective and efficient AI-powered experiences faster than ever.”
However, Snowflake also trimmed its operating margin outlook on rising AI costs. Regardless, Snowflake is preparing for growth under its new leadership. Ramaswamy’s strategy to accelerate product growth and velocity is intended to return Snowflake to its former growth levels. Combine that plan with lower lending costs, and it’s reasonable to assume that SNOW stock could look like the SNOW stock of 2022 and 2023.
Also, investors seem to be discounting the fact that Snowflake will reach net profitability in 2024. So, 50% returns are a distinct possibility.
Nio (NIO)
What if I told you Nio (NYSE:NIO) was expected to double between 2023 and 2026? Would that make the embattled stock more attractive? After all, purchasing a stock that has fallen by 49% this year is a scary proposition for most investors. You need something really compelling to galvanize action at that point.
That is the expectation for Nio. The company forecasts that 2023 revenues of $55 billion will more than double by 2026. The company is expected to begin producing per share earnings the year after, in 2027.
Nio isn’t a particularly important electric vehicle (EV) manufacturer in China. It maintains the 9th largest market share, at roughly 2% overall. But, the company is addressing increasing competition within the landscape. Neo introduced a more economically priced sub brand recently. It is aimed at providing more affordable options to Chinese consumers. Additionally, the company developed a battery swapping business that radically reduces charging times that continue to present an entry barrier to consumers broadly.
Baidu (BIDU)
Baidu (NASDAQ:BIDU) is an intriguing Chinese stock to consider as that market begins to grow with the AI opportunity. The company is the country’s leading search platform and has been likened to Alphabet (NASDAQ:GOOG, GOOGL). Likewise, Baidu offers many other similar services to Google.
Baidu is particularly interesting in relation to AI. The AI boom has been seen throughout the tech market in the U.S. but has yet to reach China with the same intensity. That isn’t to say that Baidu has not invested in AI, because it certainly has. It began investing in AI around the same time as its U.S. counterparts.
ERNIE is the most interesting of its AI projects. ERNIE is Baidu’s large language model for various applications including content and search. Also, Baidu offers pre-trained AI models available through its AI-enabled cloud service. At current prices below target lows, Baidu shares offer massive upside potential.
Wolfspeed (WOLF)
Wolfspeed (NASDAQ:WOLF) is a high potential chip stock that arguably remains under-the-radar.
The company remains focused on silicon carbide (SiC) and gallium nitride technologies. That makes Wolfspeed something of a focused play within the semiconductor sector.
Silicon Carbide chips combine silicon and carbon. That combination results in superior performance over traditional silicon chips. The emerging niche within the semiconductor industry is particularly applicable to the automotive sector. EVs themselves require far more chips than internal combustion vehicles. Wolfspeed is well positioned to capitalize on the rebound in the EV sector which is evident in projections for 2025 and beyond.
And, Wolfspeed’s expertise and focus on SiC technology makes it a targeted play on the EV rebound moving forward. If the expected surge in demand for SiC materializes, then WOLF stock will surely benefit. SiC technology is still in the early stages of development, which adds an additional risk factor to WOLF stock. Nonetheless, the potential is great.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
