3 Growth Stocks Under $30 With a Major Upside, According to Wall Street

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A a company’s stock price is not an indication of its value – rather, it is a function of its market capitalization. But a company’s share price can determine its accessibility to investors, especially beginners or those deploying small amounts of investment capital.

Take Amazon, for example. It would cost around $2,912 to buy a single share of this company at the moment, and although many brokers offer fractional shares, they are not available everywhere, and some investors simply prefer to hold whole shares. This is one of the reasons why companies love Appleand more recently, Alphabetreduce their stock price through stock splits.

But some stocks don’t have this problem. Here are three you can buy right now for less than $30 a share. As a bonus, Wall Street thinks each of these growth stocks could soar.

Image source: Getty Images.

1.GoPro

GoPro (NASDAQ: GPRO) is the long-time industry leader in action cameras, gaining popularity among extreme sports enthusiasts and everyday adventure enthusiasts. The company was first listed on public markets in 2014, hitting an all-time high of $93.85 before suffering a long 92% drop to the $7.66 it trades at today.

Investors were concerned about GoPro’s stagnant growth rate tied to a one-dimensional business model, making and selling cameras. But the company has changed things dramatically, adding new revenue streams, including a booming subscription business. About 1.6 million brand followers had become GoPro.com subscribers by the end of 2021, more than double the number at the end of 2020, each paying a recurring annual fee of $49.99 for exclusive benefits .

GoPro has also changed the way it sells its core products. Rather than relying on large retailers to sell cameras, it leverages its website to sell direct to consumer, and that channel now accounts for 34% of total sales. Eliminating retailers means more of the profit from each sale ends up in the pockets of GoPro shareholders.

Wall Street agrees with the improvements, especially one of the world’s largest investment banks, JPMorgan Chase, which analysts think GoPro could climb to $15 a share. That’s a 96% upside from the current price, but given changes to the company’s business model, that could be conservative in the long run.

2. Lemonade

No one likes dealing with their insurance company, and in the digital age where consumers value convenience and speed of service over most other things, the industry as a whole often lags behind. These are among the problems Lemonade (NYSE: LMND) tries to solve, and it has become a worthy challenger to its well-established competitors.

In fact, its website openly tells visitors that 19% of its customers have migrated to Lemonade from the insurance giant. Allstate, and this is just one example. The driving force behind Lemonade’s growing popularity is Maya, the company’s AI-powered Wonder-Bot, which can pay customer claims in less than three minutes and offer an insurance policy in 90 seconds, often without any human intervention.

But as with any disruptor, Lemonade faced challenges. It’s still about growing its business, which means introducing new products like its recent addition to motor insurance, but that tends to lead to volatility in the business’s gross loss ratio, which is a measurement of claims against gross earned premiums. The result was substantial net income losses, including more than $246 million in 2021.

Investing in Lemonade shares therefore involves risks, but over time things should improve. It has won the business of more than 1.4 million clients, after all, and the consensus on Wall Street is that its stock could rise 129% to $44.13. But analyst firm JMP Titles is much more bullish with a price target of $95, implying a 393% upside from the current price of $19.27 per share.

A smiling couple who just moved into a new house, looking at a tablet while sitting on the stairs.

Image source: Getty Images.

3. Redfin

Selling a home is something most people only do a few times in their lifetime. It can be an overwhelming experience, which is why it’s so important to hire a real estate broker to manage the process. While most brokers work within small businesses focused on a specific geographic area, red fin (NASDAQ: RDFN) has built a workforce of thousands of them spanning swathes of the United States

The benefit of such huge scale is the company’s ability to charge lower listing fees (as low as 1%) compared to the general industry average of around 2.5%. Redfin boasts that it has saved sellers over $1 billion since entering the market, and since customers are flocking to use its services, it seems like a win-win arrangement for all parties. In fact, Redfin was used in the sale of 1.16% of all homes sold across America in 2021.

The company also operates an iBuying segment, where it buys homes directly from sellers and flips them for a profit. It’s a risky business, and its main competitor Zillow Group recently left this area after suffering significant losses. Exposure to this risk is one of the reasons investors have turned their backs on Redfin shares, sending them down 31% in the past month alone; however, it is important to keep in mind that brokerage remains the main activity of the company.

At present, there is no indication that Redfin will suffer a similar fate to Zillow, and analysts predict the company will generate over $2.6 billion in revenue in 2022, representing a healthy growth rate of 39 % from 2021. But there are significant risks on the horizon with interest rates expected to rise, which could dampen the real estate market.

That being said, the consensus price target for Redfin stock on Wall Street is $47.25, which is 152% higher than where it is currently trading. Corn Truist Titles thinks it could skyrocket 370% to $88.

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Anthony Di Pizio has no position in the stocks mentioned. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. The Motley Fool owns and recommends Alphabet (A shares), Amazon, Apple, Lemonade, Inc., Redfin, Zillow Group (A shares) and Zillow Group (C shares). The Motley Fool recommends Alphabet (C-shares) and recommends the following options: $120 long calls in March 2023 on Apple, $65 short calls in February 2022 on Redfin, and $130 short calls in March 2023 on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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