In the stock market, winners are always celebrated, but intriguing opportunities are often found in the ranks of the losers — specifically, those equities that have experienced significant declines. Interestingly, today’s stock market ‘losers’ can swiftly turn into tomorrow’s winners, providing substantial rewards to investors brave enough to invest during downturns. However, it’s crucial to differentiate between stocks temporarily on the downturn and those facing prolonged struggles.
To shed light on this, we turned to expert analyses from the TipRanks database, highlighting two stocks that have plunged over 50% this year. These picks both come with a Strong Buy analyst consensus and have the potential for substantial returns. Here’s a deeper exploration:
Beam Global (NASDAQ:BEEM)
Beam Global (NASDAQ:BEEM) stands out as a leading name in clean-tech, primarily focusing on cutting-edge electric vehicle (EV) infrastructure solutions. The firm is recognized for its solar-powered EV charging stations, which are not only energy-efficient but also versatile, serving various needs ranging from public charging stations to fleet management.
Distinctively, Beam doesn’t see itself in direct competition with established EV-charging enterprises. Instead, it aims to augment the sector by providing off-grid infrastructure solutions. Moreover, Beam remains neutral regarding EV-charging equipment, ensuring it doesn’t prioritize any particular EVSE (electric vehicle supply equipment) provider, thus positioning itself as a versatile industry player.
Despite achieving record Q2 revenues of $17.82 million, a staggering 379% YoY increase, BEEM’s stock has fallen 55% this year. Analyst Abhishek Sinha from Northland points to the broader EV charging sector’s challenges and the decline of unprofitable growth stocks amid surging interest rates as reasons. However, Sinha remains optimistic, citing Beam’s strengthening fundamentals and expecting further improvements in the coming months. Sinha’s $25 price target suggests a potential 220% growth over the next year.
Avidity Biosciences (NASDAQ:RNA)
Switching to the biotech realm, Avidity Biosciences (NASDAQ:RNA) is at the forefront of pioneering RNA-targeted therapies for various diseases. Particularly, Avidity is developing antibody oligonucleotide conjugates (AOCs), combining monoclonal antibodies’ accuracy with the specificity of oligonucleotide-based medicines. Their primary focus currently is on AOCs for muscle disorders.
However, challenges arose when the FDA imposed a partial clinical hold on AOC 1001, following an adverse event during a study. Despite these hurdles, and a 70% stock decline this year, Raymond James’ analyst Steven Seedhouse remains bullish.
Seedhouse believes in Avidity’s potential to resolve the partial hold issue and envisions a promising future for the drug in a multi-billion-dollar DM1 market. Seedhouse’s aggressive $71 price target anticipates an impressive 980% growth in the upcoming year.
In conclusion, while the stock market’s ebbs and flows are unpredictable, there are significant rewards for those who identify the diamonds in the rough. As these stocks highlight, opportunities often arise in the least expected places. Investors willing to venture into these territories, with expert guidance, might just reap substantial benefits.
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