3 Monster Growth Stocks That Could Soar 31% to 116%, According to Wall Street

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25-05-2025

At least one retailer is reporting strong demand for its products despite pressure in the industry.
One restaurant chain continues to report impressive growth that could lead to tremendous gains for investors.
This e-commerce company is delivering solid growth and expanding into new businesses.
10 stocks we like better than RH ›
Finding stocks with enormous growth potential that are trading at reasonable valuations is one way to access potentially monster gains in the stock market. Promising consumer brands like RH (NYSE: RH), Cava Group (NYSE: CAVA), and e-commerce specialist Coupang (NYSE: CPNG) are trading at prices that Wall Street analysts see as attractive buying opportunities for investors.
Are these stocks truly good buys now? Here's what three Fool.com contributors think about these companies' prospects.
(RH): RH is an upscale furniture retailer. That's not necessarily a great business to be in when the real estate industry is tanking and consumers are cutting back on discretionary spending.
RH (formerly Restoration Hardware) operates a varied omnichannel business that includes a limited number of freestanding galleries in upscale neighborhoods, a strong digital presence, and offers several luxury experiences involving restaurants, yachts, jets, and a guesthouse. It's looking to become a top luxury brand rather than a simple furniture seller. Despite the pressure in the economy right now, it's launching new design concepts and opening new galleries.
It released 42 new collections over the past few months, and CEO Gary Friedman said that the company is developing a new concept that will expand its market opportunity, coming up for release toward the end of the year.
RH's results for the fiscal 2025 fourth quarter (ended Feb. 1) were mixed, with a 10% year-over-year increase in revenue and a 9% increase in operating income. Demand, which measures the dollar value of orders placed, increased 17%, and for the RH brand, it was up 21%. That indicates a strong brand with potential, and it's an impressive feat considering the pressured economy. However, RH came in below Wall Street's expectations for earnings per share by $0.33, which sent its stock plummeting.
Friedman originally said the company wouldn't be affected by tariffs on Chinese goods, but it expected uncertainty as the situation remains dynamic. Earnings were released on "Liberation Day," when President Donald Trump announced his tariffs, and management followed that up with an explanation about how it's well diversified with suppliers and doesn't think it's at any disadvantage compared with similar companies.
But these are all short-term factors. RH has a strong brand, resilient clientele, and large market opportunity. The average Wall Street analyst price target for the stock over the next 12 to 18 months is 20% higher than it is today, but Barclays analyst Seth Sigman sees it reaching $436, or 116% more than its current price.
If conditions improve enough for RH to keep reporting progress and the market climbs on economic optimism, there's a chance that could happen. But even if it doesn't reach that price in the near term, it has a robust long-term outlook.
John Ballard (Cava Group): If an investor had put $10,000 in Chipotle stock 15 years ago, those shares would be worth $180,000 today. Those investors caught an up-and-coming restaurant brand before it went mainstream. Cava may provide new investors with a similar opportunity.
Cava is carving itself a profitable niche focusing on a Mediterranean-based menu, and it is growing revenue at rates that could send the stock soaring over the next decade. It just reported another strong quarter, with revenue up 28% year over year.
Importantly, its favorable restaurant-level economics are already producing a stellar profit margin of 13.7%. This is already above Chipotle's margin and explains why the stock soared last year. Investors are giving Cava a lot of credit for strong traffic trends and a profitable formula for future expansion.
That strategy involves using technology to personalize customer communications, increase automation to make its restaurants easier to run, and deliver quality food while maintaining consistency across every location.
Wall Street is bullish and rightly so. The consensus rating is currently an overweight buy recommendation with an average price target of $116, implying 36% upside from the current $85 share price. Some analysts have even higher targets on the shares.
However, I wouldn't buy the stock expecting it to hit the consensus target in the near term. The stock appears fully valued at the moment, trading at nearly 10 times sales. The high valuation at the previous peak explains why the stock fell to start the year. For perspective, Chipotle shares trade at 6 times sales, although it's not growing nearly as fast as Cava.
But I recently took advantage of the dip to start a small position, which I plan to gradually add to as Cava continues to grow. Investors who dollar-cost average into the stock should earn a great return over time.
Jeremy Bowman (Coupang): E-commerce stocks like Amazon, MercadoLibre, and Sea Limited have all delivered strong returns, but there's another global e-commerce stock that investors should take a closer look at. Coupang, a U.S-headquartered company becoming the e-commerce leader in South Korea, is delivering impressive growth as it builds out a network of competitive advantages.
In the first quarter, revenue ticked up 11% year over year, or 21% on a currency-neutral basis, to $7.9 billion, and margins improved with the gross margin rising 217 basis points to 29.3%. Operating income rose from $114 million to $154 million.
Besides e-commerce, Coupang is finding success with new categories it calls Developing Offerings like International, Eats, Play, Fintech, and Farfetch, which rose 67%, or 78% on a currency-neutral basis. It also announced a $1 billion stock repurchase authorization, showing that the company believes its shares are undervalued.
The company is starting to get some attention from Wall Street, and one analyst sees the stock having 31% upside. Barclays analyst Jiong Shao raised his price target on Coupang from $35 to $36 following the earnings report and reiterated his overweight rating on the stock.
Looking ahead, the stock appears to have significant upside. If margins continue to improve and the tailwinds build in its developing offerings, Coupang should have a bright future.
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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 positions in MercadoLibre. Jeremy Bowman has positions in Amazon, Cava Group, MercadoLibre, and RH. John Ballard has positions in Cava Group, Coupang, and MercadoLibre. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Sea Limited. The Motley Fool recommends Barclays Plc, Cava Group, Coupang, and RH. The Motley Fool has a disclosure policy.
3 Monster Growth Stocks That Could Soar 31% to 116%, According to Wall Street was originally published by The Motley Fool