Wouldn’t you be barking mad to invest in an underdog? Not if those dogs still have some fight in them. Analysts believe that two beaten-down stocks, Li Auto (LI) and Five Below (FIVE), are poised for a rebound. Both stocks have experienced significant drops of over 40% this year but are considered strong buys by market analysts.
LI and FIVE have faced missed earnings expectations and market volatility. However, analysts believe these setbacks are temporary and that both stocks offer significant potential for recovery. Undervalued stocks that have been oversold and are likely to rebound present opportunities for investors willing to take calculated risks in pursuit of substantial returns.
Li Auto (NASDAQ: LI)
Li Auto, a Chinese electric vehicle company, has seen its stock drop 43% year-to-date. Despite this, the company has shown impressive growth, with June deliveries up 46.7% YoY and total cumulative deliveries reaching 822,345 vehicles. The latest speculation is that LI Auto might even eclipse Tesla—at least in its home market. The company specializes in premium SUV EVs. Morgan Stanley analyst Tim Hsiao maintains a Buy rating on LI stock, with a price target suggesting a 149% upside potential. The consensus among analysts is a Strong Buy rating, with an average price target implying a 63% gain. LI shares are currently trading at $20.79, down 2.28%.
Five Below (NASDAQ: FIVE)
Founded in 2002, Five Below is a Philadelphia-based discount retailer. As the name suggests, they sell a wide assortment of discounted goods, mostly $5 or less. The chain store has more than 1,600 locations in 43 states. Discount stores have been going strong since 2020, especially during pandemic lockdowns when customers were on the prowl for bargains.
Despite missing revenue and earnings expectations in its fiscal Q1 2024 report, analyst Randal Konik at Jefferies maintains a Buy rating on FIVE stock. He cites the company's value-oriented offering, scaling business model, and growth potential as reasons for optimism. The consensus among analysts is a Strong Buy rating, with an average price target suggesting a 55% upside. Shares are currently trading at $98.85.
Neither Julie Stoller nor Stocks.News have positions in this company.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...