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2 Nasdaq Stocks with Up to 115% Upside for 2025, per Wall St Analysts

2024-12-08

The stock market has been on an astonishing journey, yet there are still numerous stocks that hold significant potential for further growth, as stated by Wall Street. The Nasdaq Composite, a tech-centered index tracking over 3,000 listed stocks, has witnessed remarkable climbs this week. The Nasdaq, S&P 500, and Dow Jones Industrial Average all reached record heights, continuing a series of all-time highs this year. This ongoing rally has led many stocks to reach or approach new record highs, leaving investors pondering if there is still room for more gains. However, these concerns are unfounded, as Wall Street remains highly optimistic. As we approach the end of the year, forecasts for 2025 are continuously rising, providing valuable insights. Analysts at Goldman Sachs predict the S&P 500 will reach 6,500 in December 2025, indicating a potential 7% increase from Thursday's closing price. Bank of America issued a year-end price target of 6,666 for 2025, representing a 10% upside from its current level. Just this week, Wells Fargo presented the most bullish forecast yet, calling for the benchmark index to hit 7,007 next year, suggesting potential gains of about 15%. Despite the recent surge, there are abundant opportunities. Let's explore two Nasdaq stocks with potential upside of up to 115%, as identified by certain Wall Street analysts.

Uncover the Stocks with Extraordinary Upside in the Stock Market

Sirius XM Holdings: Implied Upside of 59%

Sirius XM Holdings (SIRI 4.58%) stands out as the first Nasdaq stock with substantial potential upside. This company dominates satellite radio services in North America, boasting 34 million paying subscribers. When including its ad-supported Pandora music streaming service, its customer base expands to an impressive 150 million, making it unrivaled in terms of audience reach. However, the recent economic downturn and a complex merger took a toll. High inflation forced cash-strapped consumers to make difficult decisions with their limited disposable income, leading some to let their SiriusXM subscriptions lapse. There was also a fundamental misunderstanding of its recent merger, reverse stock split, and the resulting complex accounting transactions, which negatively affected its results. These factors combined caused the stock to decline by 51% this year. But appearances can be deceiving. In the third quarter, Sirius' revenue slipped 4% year over year to $2.17 billion, with a loss per share of $8.74 compared to diluted EPS of $0.82 in the previous year quarter. However, this needs to be viewed in context. The company took a one-time, non-cash impairment charge of $3.36 billion related to its acquisition of Liberty Sirius XM tracking stock. Without this one-time charge, Sirius would have achieved EPS of approximately $1.17, representing a 43% increase. At the same time, paid subscribers increased by 14,000 due to lower churn. Paid promotional subscribers, which declined by 114,000 as automakers transitioned to shorter or unpaid plans, further impacted the results. Some on Wall Street believe the selling has gone too far. Benchmark analyst Matthew Harrigan maintains a buy rating on Sirius XM with a price target of $43, indicating a 59% upside compared to Thursday's closing price. The analyst cites an investor disconnect surrounding the recent merger and believes that management's "strategic initiatives" will bear fruit. Moreover, the lower stock price presents a compelling opportunity for savvy investors like Warren Buffett, who has been accumulating the stock. Sirius XM is currently trading at around 8 times earnings, with little future growth factored into the stock price, presenting a significant opportunity.

I am confident that with the steadily improving economic conditions, churn will continue to slow down, and subscriber growth will gradually resume, which will be the catalyst needed to drive Sirius XM stock higher.

Symbotic: Implied Upside of 115%

One outcome of the rise of online retail has been a rush to modernize warehouse automation. This is where Symbotic (SYM 0.14%) steps in. The company has developed artificial intelligence (AI) solutions to automate the processing of individual cases and full pallets, maximizing the use of warehouse space. Symbotic has created advanced algorithms that control a fleet of smart robots working together to stock pallets, load and unload trucks, and handle individual crates. By doing so, the company can fit more inventory into less space, saving customers money. By increasing efficiency, reducing labor costs, and cutting operating and delivery expenses, Symbotic's systems generate quick returns. The company estimates that each "module" can pay for itself multiple times during its useful life, saving companies tens or even hundreds of millions of dollars. The results speak for themselves. In its fiscal 2024 fourth quarter (ended Sep. 28), Symbotic's revenue grew by 47% year over year to $577 million, with EPS of $0.05, reversing a significant loss in the previous year quarter. After announcing a restatement of earlier 2024 quarterly financial reports, management noted that these were due to timing differences with "no impact to full-year fiscal year 2024 results." On Thursday, Symbotic filed its annual report with no further changes, removing the final uncertainty from the stock. Following the company's quarterly results, Cantor Fitzgerald analyst Derek Soderberg reiterated his overweight (buy) rating and $60 price target on the stock, representing a 115% potential upside compared to Thursday's closing price. The bullish stance came after the analyst questioned management about its recent international expansion agreement with Walmex and the status of its warehouse-as-a-service joint venture. Similar to many early-stage, high-growth stocks, Symbotic stock carries some additional risk, so any position should be managed appropriately. On the bright side, after its recent sell-off, Symbotic is trading at a bargain price of just 1.5 times sales. I believe this is an attractive price to pay for a leader in an emerging AI-driven industry.

Many investors seek dividends that offer more than just a short-term gain. The durability of dividends is a crucial factor, influenced by a company's financial strength and business model resilience. In this article, we explore three real estate investment trusts (REITs) - Agree Realty, Stag Industrial, and Sun Communities - that possess these durable traits and are ideal for those seeking enduring income.

Discover REITs with Enduring Dividend Power

Agree Realty: A Model of Consistency

Over the years, Agree Realty has stood out for its remarkable consistency. With a solid 5.7% annual growth rate in dividends during the past 10 years, it offers a current yield of over 4%, significantly higher than the S&P 500's 1.2% yield. The company has built a strong foundation by focusing on owning freestanding properties leased to high-quality retailers. These retailers, accounting for 67.5% with investment-grade credit, are in resilient sectors such as grocery, home improvement, tire and auto service, and convenience stores. Utilizing long-term net leases or ground leases ensures predictable rental income as tenants cover all operating costs. Agree Realty also has an excellent investment-grade credit rating backed by a low leverage ratio, providing financial flexibility to continue acquiring income-generating retail properties. Its conservative dividend payout ratio of 73% of adjusted funds from operations (FFO) further strengthens its position. With a long growth runway ahead, as it works directly with many high-quality retailers owning over 168,000 locations, it is set to generate a steady stream of sale-leaseback transactions in the coming years.

Stag Industrial: A Steady Performer

Stag Industrial has been highly consistent over the years. Since going public in 2011, it has increased its dividend every year and offers a dividend yield above 4%. The company owns a diversified portfolio of industrial real estate, including warehouses and light manufacturing facilities. Leasing these properties to high-quality tenants under long-term agreements with annual rent escalations (averaging 2.8% in 2024) benefits from robust demand due to the growing adoption of e-commerce and onshoring of manufacturing. As a result, it captures much higher rental rates once legacy leases expire, with 30% rental increases on new and renewal leases for the same space in 2024. Stag Industrial also has a low-leverage balance sheet and a conservative dividend payout ratio of 73%. On track to generate about $100 million in post-dividend free cash flow this year, it has additional cash to invest in acquiring more income-producing industrial properties. With a planned acquisition of $500 million to $700 million of properties this year and a $4.2 billion deal pipeline, it is well-positioned for growth.

Sun Communities: A Unique Residential REIT

Sun Communities has a remarkable track record of never cutting or suspending its dividend in three decades as a public company. It has routinely increased payments over the years, including eight consecutive increases. Focusing on properties off the beaten path from other real estate investors, such as manufactured home communities, RV resorts, marinas, and holiday parks in the U.K., these properties benefit from very durable demand. For instance, the high cost of relocating a manufactured home keeps residents in place. Meanwhile, the growing demand for outside experiences is driving demand for space at its RV parks and marinas. As a result, Sun Communities has delivered 20 straight years of rising same-store net operating income (NOI), with an overall 5.2% compound annual rate increase since 2000, faster than the REIT sector average of 3.2%. By making acquisitions and investing in expanding existing locations, such as adding marinas and U.K. holiday parks to its portfolio, and having ample financial flexibility thanks to its solid investment-grade balance sheet, it is well-equipped to continue expanding its portfolio.Three rock-solid dividend stocks - Agree Realty, Stag Industrial, and Sun Communities - have long histories of paying durable and growing dividends. Backed by resilient real estate portfolios and strong balance sheets, they are likely to continue providing their investors with steadily rising income in the decades ahead.Matt DiLallo has positions in Stag Industrial and Sun Communities. The Motley Fool recommends Stag Industrial and Sun Communities. The Motley Fool has a disclosure policy.

As 2025 approaches, it becomes an opportune moment to assess our financial path in 2024 and envision where we aim to be in the coming years. This reflection not only encompasses hopes and dreams but also the crucial task of identifying mistakes to avoid, ensuring we stay on course to achieve our financial planning goals.

Navigating the Financial Landscape for a Brighter Future

The Pitfalls of Sector Rotations

In 2022, several mega cap growth stocks faced significant setbacks due to valuation concerns, inflation, and slowing growth. Take Apple, Microsoft, Alphabet, Amazon, Tesla, Nvidia, and Meta Platforms. At the end of 2022, their combined market capitalization was $6.9 trillion. However, just less than two years later, it surged to $17.6 trillion. Investors who panicked and sold out of these growth stocks missed out on a remarkable rally.Another notable example is during the 2020 downturn when oil and gas stocks were sold off. Over the last four years, the energy sector has witnessed an impressive 129% growth. Similarly, in 2023, after the banking crisis that led to the failure of some small to mid-size banks, many sold out of the financial sector. Yet, so far this year, financials have emerged as the best-performing sector, outperforming tech and many growth-focused ETFs. The key lesson here is that markets move in cycles, and quality companies with earnings growth tend to prevail in the long run.

Managing Momentum

Based on the previous point, it's important to avoid overhauling our investment strategy based solely on short-term momentum. For instance, if one is unfamiliar with cryptocurrency, buying Bitcoin just because it has surged in a short period is a bad idea. But if proper research indicates a long-term interest in Bitcoin, that's a different story.Another example is blindly piling into hot tech stocks without conducting research. However, there are valid reasons to invest in artificial intelligence themes. For example, Nvidia's ability to fend off competition and maintain ultra-high margins is highly encouraging. Similarly, enterprise software companies like Salesforce, which had been lagging, are now successfully monetizing AI and reaching new highs. The AI-driven rally is largely driven by existing earnings growth rather than potential growth. Therefore, it's crucial to take the time to research the industry and identify the companies with the most conviction and the willingness to hold through volatile periods.

Be Proactive, Not Reactive

Each year brings new expectations, challenges, and fears. It's easy to get swayed by factors that seem prominent in the moment and develop recency bias. While being aware of these factors and their impact on our investments is essential, overreacting to them can be a major mistake.For instance, the new administration will bring policy changes that will likely affect corporate taxes, trade policy, energy policy, and renewable energy tax credits. Currently, there is an abundance of media speculating about what the new administration will do, and this speculation can lead to highly volatile price movements in various assets. Making significant changes to our portfolio based on short-term guesses is not a wise decision. Instead, we should focus on the companies we have invested in and ensure they can perform well regardless of the administration in charge. In other words, do they have the resilience to endure challenges and even gain market share during an industry-wide downturn? Or could their finances be at risk? And if so, is that risk already reflected in the price and something we are willing to accept?

Mistakes Happen All the Time

Every investor makes mistakes. As we progress on our investment journey, it's likely that we will accumulate our fair share of regrets. However, by taking a deep breath and identifying potential mistakes in advance, we can prevent them from occurring.Now is the perfect time to assess our investment tendencies and address any areas where we may be prone to making errors. By doing so, we can better align our investments with our financial goals and navigate the complex world of finance with more confidence.