Contrarian Stocks With Upside Potential

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Contrarian Stocks With Upside Potential

2 Contrarian Stocks With Strong Upside Potential

One of the hardest things is to buy stocks that are facing challenges and are in a downtrend. What makes it so difficult is that no one knows when the turnaround will come or if it will ever happen in the first place.

But it is also a reality that buying contrarian stocks is what leads to major gains. One good option from the past is Gamestop, which moved from lows and proved everyone wrong.

With that in mind, we have picked two contrarian stocks that have strong upside potential:

Duolingo

Duolingo shares have taken a beating in the last 12 months. The stock price is down by 80%, and most of it is due to AI fears.

There is a perception that AI can steal Duolingo's business. If you think about it, anyone can now learn a new language with the help of AI for free. Also, it has gotten very easy to make new apps with AI that are similar to Duolingo. All of these factors have led to a major decline in the Duolingo stock price.

But if we keep these fears aside, the financial situation tells a different story. The growth rate is slowing down, but the company's financial situation is still very strong.

In the last 12 months (trailing), Duolingo's sales were $1.1 billion, and $422 million was net income. So, while the AI fears may be somewhat true, the bottom line is that Duolingo is doing really well. Also, the Duolingo stock valuation shows it is very cheap and thus has ample room to move upward!

Pfizer

Next up is Pfizer, which has gained 16% in the last 12 months. However, it is still far from its ATH as the stock crashed by 56% in 2022.

A quick look at Pfizer reveals it is trading at a heavily discounted price. But why is it trending lower? There's uncertainty about the future due to patent cliffs on many different drugs.

So, if Pfizer doesn't acquire new products or develop new drugs, its revenue will decline. But the good news is that Pfizer has a lot of new drugs in the pipeline. The latest data shows that Pfizer has 96 drugs in the pipeline. So, yet another good stock to consider is Pfizer from the healthcare sector.

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