5 Stocks With 1,000% Upside Potential
It has been a brutal bear market, and many stocks have fallen by 50%, 60%, 70% or even more. There will be names that go bankrupt, but some will roar to new highs. That has us looking for stocks that can rally 1,000%.
Buying a stock before it goes up 1,000% is no easy feat. It takes patience, good timing and a bit of luck.
The years 2020 and 2021 were somewhat unusual. Normally, global central bankers do not immediately respond to stock downturns with large amounts of liquidity, helping to fuel markets to new all-time highs. Of course, we are paying the price for that now, but it was not uncommon to see massive gains in a short period of time for many growth stocks between the 2020 lows and early 2021.
Several stocks, however, delivered 1,000% gains between 2010 and 2020.
Domino’s Pizza (NYSE:DPZ), Netflix (NASDAQ:NFLX), Nvidia (NASDAQ:NVDA) and Lululemon Athletica (NASDAQ:LULU) are just a few that come to mind. Let’s look at a few stocks that can gain 1,000% in the next decade.
Stocks With 1,000% Upside Potential: DigitalOcean (DOCN)
It would likely take years, but I could see DigitalOcean (NYSE:DOCN) generating a 1,000% return by the end of the decade. Some investors may not be interested in DOCN after reading that. They got used to seeing stocks soar 1,000% in less than one year during the pandemic.
But such returns were highly abnormal!
It normally takes years to generate a gain of that magnitude. But DigitalOcean might be able to soar 1,000%. From its 52-week low, a rally of “just 400%” would get the shares back to their all-time high near $132.50.
However, we’re talking about a company that is profitable and generates free-cash flow, along with immense revenue growth. If DigitalOcean can keep up that type of momentum, it will eventually be rewarded. Of course, if it drops — say, to $15 or $20 — then it will be easier for the shares to soar 1,000%.
Stocks With 1,000% Upside Potential: Twilio (TWLO)
Twilio (NYSE:TWLO) is a controversial stock and for good reason. Many growth investors held its shares for quite some time, and it was one of the first growth stocks to come roaring to life after the Covid-19 selloff.
For example, it took less than two months for Twilio stock to nearly triple from its Covid-19 low. Twilio’s stock peaked in February 2021, well ahead of the many high-quality growth stocks that reached their highest points in the fourth quarter of 2021. In hindsight, that was a red flag for TWLO.
Twilio’s stock has been falling sharply. It suffered a one-day decline of more than 34% in early November following its earnings and is now down 90% from its highs. I don’t know if or when Twilio’s stock will recover its highs, but the company still provides value to its customers.
If it does bounce back to its highs, it will have soared 1,000%.
Stocks With 1,000% Upside Potential: Olaplex (OLPX)
I highlighted Olaplex (NASDAQ:OLPX) earlier this quarter and it has since rallied more than 50%. Now that the shares have dropped again, investors may want to take a second look at them.
The shares tumbled 56% in one day after the company cut its guidance and its COO resigned. But I believe that the recent decline of the stock was unjustified.
I’ll admit that the news was not favorable for the company. However, the shares were already down 67% from their highs before that news. And after the decline, Olaplex was 87.5% from its all-time high reached in December 2021.
Based on the stock’s decline, you would think this company is on the brink of bankruptcy, and that all of its top executives walked out in October. That’s hardly the case, though.
In fact, OLPX is profitable, and analysts, on average, expect its revenue to increase 18% this year to $706 million. Analysts’ mean estimate calls for the company’s revenue to grow again next year, while the stock trades at about 12 times this year’s average earnings estimate.
If the stock falls to its low again, it may be worth buying as a speculative investment.
Speaking of speculative, Ondas (NASDAQ:ONDS) is without question the most speculative name on this list. Some of these other companies may struggle to generate profits, but all of their top lines are high relative their market capitalizations, and they have good businesses.
Ondas could have a good business in the future, but it has not yet blossomed.
According to the company, “The Ondas platform enables wide area intelligent networks for smart grids, smart pipes, smart fields and any other mission critical network that needs internet protocol connectivity.”
ONDS has a ton of untapped potential revenue, and the rewards for the firms in its industry can be enormous. Ondas has received orders and government approvals, but so far, it’s still an early stage, speculative company.
It has a great deal of potential, but it also carries a lot of risk. That combination is reflected in analysts’ average estimates for ONDS. Their mean estimates calls for $3.2 million of sales this year for ONDs, but almost $25 million next year.
But if companies and governments reduce their spending, Ondas’ revenue could end up being significantly below those levels.
Last but not least, we have Snap (NYSE:SNAP). This stock has been hammered and understandably so. When the times are good, the company generates large amounts of ad revenue, and its stock price tends to roar higher. However, when marketing budgets tighten, Snap’s growth sharply decelerates, and the stock tumbles.
We can all agree that Meta (NASDAQ:META) has had a pretty bad year, right? It has suffered a peak-to-trough decline of 77%. However, Snap’s shares have done even worse, suffering a total decline of 91%.
As a result of that tumble, if Snap ever revisits its highs, it will have logged a 1,000% gain. The fact that the stock rallied over 950% from its Covid-19 low makes me more optimistic about its ability to soar 1,000% going forward. Once companies start spending more on ads again — and if SNAP stock falls to new, 52-week lows beforehand — I do think this name could soar in the future.
On the date of publication, Bret Kenwell 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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
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