Investing Insights: 2 Stocks Down 50% with High Rebound Potential
Written on
Chapter 1: Market Overview
The stock market has seen considerable turbulence recently, leading many stocks to plummet to significant lows. Investors who are keen on identifying potentially undervalued companies might find promising opportunities if they can select the right candidates for a rebound. Here, we’ll focus on two stocks trading at less than half of their peak prices from the past year that warrant investor attention.
Section 1.1: DraftKings Inc. (DKNG)
DraftKings, a rapidly growing online gaming firm, has made waves in the market since its SPAC reverse merger. Established in 2012, the company initially focused on fantasy sports, starting with baseball, but has since diversified significantly. They now offer online gambling and have recently launched the DraftKings Marketplace for trading sports-related NFTs (non-fungible tokens).
Online betting is integral to DraftKings' future. With more states legalizing this form of gambling, the company is working diligently to ensure they are at the forefront of this burgeoning market. Currently, they operate in 17 states, with several more in the pipeline for legalization.
To solidify their presence, DraftKings has invested heavily in marketing and acquisitions, spending over $700 million in the first three quarters of 2021. Although this expenditure may not reflect well on their balance sheet initially, the long-term gains could be substantial.
At present, DraftKings is trading at $20.75 per share, a stark contrast to its 52-week high of $74.38. The investments made are still seen as strategic for future growth. If the company can expand into more states and demonstrate strong customer engagement and revenue, this moment could be viewed as a rare opportunity for savvy investors.
TipRanks shows optimism, with 11 out of 21 analysts rating it as a "Buy." The average 12-month price target stands at $42.79, representing a potential increase of 107% from the current price.
The first video discusses two stocks that have dropped by 50% or more but may still be worth examining more closely.
Section 1.2: Teladoc Health, Inc. (TDOC)
Teladoc, a provider of online health services, has faced challenges entering 2022, currently trading at $70.25, down from a high of $308.00 earlier in the year. The surge in stock price was largely driven by an influx of patients due to Covid-19 lockdowns, rather than a true reflection of their business fundamentals.
Despite this, Teladoc anticipates growth in a market projected to reach $500 billion over the next five years. The demand for quick access to chronic illness care and mental health services continues to rise, and the company has demonstrated strong annual growth. Their merger with Livongo in 2020 has also boosted their capability in chronic healthcare management.
The telehealth sector is still nascent, with compounded annual growth expected to exceed 32%, according to Fortune Business Insights. Teladoc has reported positive cash flow in three of the last five quarters, signaling potential stabilization and refinement of their business model.
Currently, they have 52.5 million subscribers, reflecting a modest 2% growth year-over-year. However, the revenue generated per member has more than doubled in the past year, increasing from $1.18 to $2.57.
Analysts remain bullish on Teladoc’s future, with 21 providing insights, including 11 recommending "Buy" and 10 suggesting "Hold." The average price target for the next 12 months is $142.45, indicating a healthy potential increase of 102%.
The second video outlines the recent surge in the S&P 500 and the Dow, which jumped over 450 points, as stocks rebounded from their worst week of 2024.
Chapter 2: Conclusion
Successful stock investors seek out companies that they believe possess significant potential for growth and profitability. While identifying such companies is no simple task, DraftKings and Teladoc may present attractive options for those willing to conduct thorough research.
Disclaimer: The author does not claim to be a financial advisor. The views expressed in this article are intended solely for educational purposes and should not be interpreted as specific advice for any individual or investment. Investors are responsible for their own financial decisions, and there is no guarantee that stocks or cryptocurrencies will meet analysts' projections or appreciate in value. Always conduct your own due diligence before investing. The author holds a minor position in DraftKings and Teladoc at the time of writing.
If you are searching for a stock and crypto trading platform, consider signing up for Webull. You can receive free stock(s) valued up to thousands of dollars by registering through this referral link and making a minimum deposit (check their site for current promotions). I've found Webull to be a valuable resource and will also receive a free stock if you sign up.