3 Monster Stocks That Could Soar 44% to 72%, According to Wall Street

Source The Motley Fool

Growth stocks are a great tool to build lasting wealth in the stock market. Three Motley Fool contributors believe Celsius Holdings (NASDAQ: CELH), Sweetgreen (NYSE: SG), and Shopify (NYSE: SHOP) offer excellent return prospects over the long term, but Wall Street analysts also see the potential for upside in the near term. Analyst price targets on these stocks range from 44% to 72%. Here's why these stocks could deliver solid returns in 2025 and beyond.

This leading energy drink brand is undervalued

John Ballard (Celsius Holdings): Celsius has emerged as a leading brand in a growing energy drink market. It has delivered phenomenal returns to investors over the last five years, but it's currently dealing with a weak consumer spending environment that is weighing on retail traffic and pressuring sales growth.

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The stock has fallen 78% from its previous peak, but Wall Street analysts see significant upside from these levels. The average price target is currently $37.91, implying upside of 72% at the time of writing.

The stock is trading at a much lower price-to-earnings (P/E) multiple, which may undervalue its future growth. Celsius is in a solid competitive position, aligning its brand with the trend toward zero-sugar and "better-for-you" ingredients. Over a quarter of energy drink consumers between the ages of 18 and 34 say that healthy ingredients are important in their purchase decisions.

It's for these reasons that Celsius stock is a good bet at these lower share prices. The energy and sports drink market is expected to grow from $112 billion this year to $136 billion by 2029, according to Statista.

Celsius has grown much faster than the industry, increasing annual revenue from less than $100 million to over $1.3 billion in the past five years. That leaves plenty of headroom to gain more share over the long term to fuel above-average growth.

Analysts expect Celsius to report a revenue increase of 3% for 2024 before improving to 15% in 2025, according to Yahoo! Finance. The stock's forward P/E of 23 is a very reasonable valuation to start a position. The timing of when it reaches the average analyst price target is uncertain because it has a lot to do with macroeconomic factors that are outside the company's control. For this reason, the stock may hit new lows before it heads higher, but investors should expect the stock to deliver excellent returns over the long term.

Can this fast-casual restaurant chain rocket 72% this year?

Jennifer Saibil (Sweetgreen): Investors who missed Chipotle Mexican Grill's stunning success are keeping their eyes out for the next successful fast-casual restaurant brand. Sweetgreen, which focuses on healthy bowls and salads, is a small but growing chain, and the market sees a lot of potential.

Sweetgreen had 235 locations as of the end of the 2024 third quarter, and it opens at a fairly slow rate. It opened five net new stores in the third quarter, with plans for around 25 for the full fiscal year. Revenue increased 13% year over year in the quarter, driven by new stores and helped along by same-store sales, which were up 6% year over year. That's a strong showing considering the high-inflation environment, and it implies a strong future for this small company.

Although Sweetgreen isn't profitable, it's getting closer. Operating loss improved from $26.5 million last year to $21.5 million this year, and restaurant-level profit was $34.9 million at a 20% margin, up from $29.1 million at a 19% margin the previous year. It isn't likely to become net profitable this year, and Wall Street is expecting a $0.41 loss per share in 2025. But investors are excited about the concept, and Sweetgreen is just starting. It's likely to hit profitability as it scales.

Sweetgreen stock is up 112% over the past year, but it still appears to be reasonably priced, trading at a price-to-sales ratio of just over 4. That's an excellent price for a stock with a lot of future potential, and it's not surprising that the average price target consensus on Wall Street is $43.50, or 72% higher than it is today.

Still, this isn't a stock for every investor. The company is young and unprofitable, and although that comes with huge upside potential, it also comes with risk. If you have an appetite for some, you might want to follow Wall Street into a small position in Sweetgreen stock.

This growth stock has gotten its groove back

Jeremy Bowman (Shopify): Shopify was one of the biggest losers in the 2022 bear market, but after a reset that involved divesting the Deliverr fulfillment business and forging a detente with Amazon around Buy with Prime, Shopify is back to delivering impressive growth on the top and bottom line.

In the fourth quarter, gross merchandise value, or the value of goods sold on its platform, rose 26% to $94.4 billion, which lifted revenue up 31% to $2.81 billion, topping the consensus at $2.73 billion.

The company is now solidly profitable on a generally accepted accounting principles (GAAP) basis, and operating income improved from $289 million to $465 million.

Better yet, Shopify expects its strong growth to continue into 2025, calling for mid-20s percentage growth in revenue and low-20s growth rate in gross profit.

Shopify is consistently innovating and growing, attracting new businesses, both large and small, to its leading e-commerce platform, and the company is earning recognition from Wall Street.

Citigroup recently raised its price target on Shopify stock from $143 to $175, noting more optimism in front-office software budgets, a sign that more companies were likely to move to Shopify's platform. Based on that price target, Shopify stock has 44% upside.

The stock might be expensive at a price-to-earnings ratio of 80, but the company has proven it deserves a premium. Shopify looks like a good bet to keep moving higher.

Should you invest $1,000 in Celsius right now?

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Citigroup is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in Amazon, Chipotle Mexican Grill, Shopify, and Sweetgreen. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Celsius, Chipotle Mexican Grill, and Shopify. The Motley Fool recommends Sweetgreen and recommends the following options: short March 2025 $58 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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