Growth Stocks in Healthcare and Finance Predicted to Surge by Wall Street

Growth-oriented investors often seek out stocks with the potential for significant appreciation. Two sectors currently in the spotlight for such opportunities are healthcare and finance, particularly companies involved in manufacturing blood sugar monitors and providing business automation software. Despite a recent dip in the stock market, Wall Street analysts remain optimistic about the future of these stocks.

Analysts have set ambitious price targets for these companies, suggesting possible increases of 33% and 45%. However, investors should approach these predictions with caution, as analysts might revise their estimates downward if company performances fail to meet expectations, and a poor investment decision could lead to substantial losses.

Monitoring Blood Sugar with DexCom

DexCom, known for its continuous blood glucose monitors (CGMs) for diabetes patients, experienced a drop in share value despite reporting strong financial results. The company's sales are growing at a rapid pace, outpacing its expenses, and it has predicted revenue growth of 16% to 21% in 2024. TD Cowen's analysts have raised their price target on DexCom to $160, a 33% upside potential, as the company continues to introduce its G7 device in the U.S. market.

While DexCom enjoys a sizeable market opportunity with more than 10% of American adults living with diabetes, the stock currently trades at a premium — about 69 times this year's projected earnings. This high valuation poses significant risks for investors unless DexCom continues its swift expansion trajectory.

Automating Finance with Bill

Another growth stock in focus is Bill, which offers businesses of various sizes the technology to automate payments and expense management. Despite a 17% decrease in its share price post-earnings report, analysts still look favorably on its prospects. Oppenheimer, for instance, has set a price target that would mean a 45% increase from its recent trading level.

Bill continues to thrive in customer growth, even amid recession fears, with its client base expanding by 8.7% year over year. The volume of payments it processed during the last quarter of 2023 rose by 11%, signifying robust engagement from existing customers. With the potential to tap into millions of small businesses still relying on manual processes, Bill's market opportunity is expansive.

Currently, Bill's shares are available at around 32 times the company's trailing free cash flow. This valuation could be attractive given the company's growth rate, suggesting that adding Bill to a diversified investment portfolio might be a prudent choice at present.

growth, healthcare, finance