It's been a difficult year for stocks (and investors) in general. But certain stocks have had a particularly trying time. These companies faced specific challenges -- and that's sent their shares tumbling further than the general market. In many cases, the companies have overcome or are in the process of overcoming their troubles. And they're ready for a rebound. So right now is the time to bet on these players.
I'm thinking about a leader in telemedicine, a coronavirus vaccine latecomer, and a much-loved entertainment company that recently reported big news. Let's take a closer look at these potentially explosive stocks to buy before 2023.
1. Teladoc Health
Teladoc Health (TDOC -2.40%) has dropped almost 70% this year. The telemedicine giant reported billion-dollar non-cash goodwill impairment charges in its first two quarterly reports. These were linked to its purchase of Livongo back in 2020. This reinforced investors' worries about the company's lack of profitability so far.
But things are turning around for Teladoc. In the third quarter, it didn't report additional impairment charges. Instead, it said its quarterly loss narrowed. The company also made progress in other key areas.
For example, it continued to grow U.S. paid members and revenue per member from quarter to quarter over the past year. Teladoc also reported an increase in deal size. The average deal today is 50% bigger than the average one a year ago.
It's also important to note that the Livongo chronic care purchase may eventually pay off. Teladoc's suite of chronic care offerings have helped it lift member retention rates.
Today, Teladoc is trading for 1.9 times sales. That's around its cheapest ever. If Teladoc delivers more good news, share price gains could be mammoth.
2. Novavax
Novavax (NVAX 3.54%) is heading for almost a 90% annual decline. This is a far cry from its 2,700% gain back in 2020.
What's happened? Investors back then bet on the company's ability to bring a coronavirus vaccine to market. Novavax did so -- but about a year later than today's market leaders. As a result, Novavax missed out on the initial multi-billion-dollar opportunity. And the shares plummeted. That was disappointing.
But here's the good news. The story isn't over for Novavax. The coronavirus vaccine is Novavax's first commercialized product. And it helped the company generate $735 million in third-quarter revenue. Recently, regulators OK'd the vaccine for use as a booster. This sets Novavax up to participate in the annual coronavirus booster market.
Recurrent revenue should help Novavax move its other pipeline products forward and grow as a company. And speaking of pipeline, Novavax is about to start a phase 2 trial for its combined coronavirus/flu vaccine candidate. Success here could equal a significant position in the long-term vaccine market.
Especially considering Novavax's losses this year, any positive news on booster sales or the combined vaccine program could kick-start a new phase of share price gains.
3. Disney
Disney (DIS -0.04%) continues to put a smile on the faces of its guests. But it hasn't put a smile on the faces of investors this year. The entertainment giant missed analysts' sales and profit estimates in its most recent earnings report. And the stock has dropped more than 35%.
Costs across Disney's businesses have hampered growth. So why should you buy Disney stock before 2023? Because the company may be on the path to solving its problems.
Disney recently brought back longtime chief executive officer Bob Iger. He's known for many Disney successes. Iger led big strategic moves like the acquisition of Pixar. And Iger was CEO when the company created and launched blockbuster Frozen.
Disney's earnings and share price climbed during Iger's tenure.
These days may be particularly challenging. The pandemic continues, and higher inflation and general economic woes are weighing on consumers' wallets. Still, Iger, with his years of experience in this top role at Disney, is the perfect person to take on the task.
And progress to come could result in explosive growth for this beaten-down entertainment stock.
