Let’s be real. Tons of top meme stocks €”WeWork, Smile Direct Club, Bed Bath & Beyond €”are delisted, with a handful of stragglers earning penny stock status as they cling on to the thinnest air of legitimacy.
But all isn’t lost for a handful of meme stocks. Although the past few years’ worth of economic tightening courtesy of the Fed have been painful for many investors, the upside is that the companies who fought through the ZIRP era’s twilight period and entered 2024 intact have what it takes to keep kicking.
Better yet, some of those meme stocks are set to rebound. While some of the renewed enthusiasm is due to “imminent” rate cuts, I wouldn’t bet the bank on a known unknown as risky and complex as whether Powell and his crew will go back on their “higher for longer” promise.
Instead, if you’re looking for meme stocks that will rebound before summer hits, first make sure you’re picking a company with a viable path forward if not outright profitability and strong fundamentals by this point.
Teladoc Health (TDOC)
Mid-pandemic exuberance propelled Teladoc Health (NYSE:TDOC) upward alongside other stocks capitalizing on remote trends and social distancing like Peloton.
This makes TDOC an archetypal meme stock, especially considering it trades more than 90% below its past highs. But this dramatic drop doesn’t purely reflect poorly on its business model or long-term viability. Instead, Teladoc has a continued place in tomorrow’s global healthcare infrastructure.
The pandemic validated telehealth’s effectiveness and cemented remote physician care as a permanent fixture. Currently, over 20% of adult patients opt for telehealth instead of in-person visits, with a preference for remote care increasing with age.
For instance, 43% of patients aged 65 and above leverage telehealth services compared to just 29% of those aged 18 to 29. As our national population ages, telemedicine’s market penetration should grow.
Remember, despite Zoom’s dominance today, telehealth’s future lies in specialized, not generalized, systems. A single data breach or HIPAA lawsuit could undermine the healthcare endeavors of broader platforms like Zoom. As healthcare delivery and interaction methods evolve, Teladoc positions itself as a top healthcare stock, not to mention a meme stock ready to rebound.
Palantir (PLTR)
Calling Palantir (NYSE:PLTR) a meme stock ready to rebound might not be quite accurate, considering the stock’s climbed more than 100% over the past year.
But it’s still well below all-time highs and, critically, among just a handful of meme stocks that did a hard pivot into pure profitability. Palantir’s already marked four consecutive profitable quarters and is on track to hit its fifth on a February 5th earnings call.
That newfound and consistent profitability positions Palantir for S&P 500 inclusion, which should be an easy swap before summer, considering its market cap is higher than three-fifths of the existing index incumbents.
Not resting on its laurels, Palantir’s ongoing and advanced AI initiatives are set to spark further growth. Palantir stands out in the AI sector, with a proven platform and strong performance.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) is priced so low it’s hovering in penny stock territory. Despite its bottom-barrel market cap (just $1.43 billion), the current per-share price is just 0.4x Tilray’s book value.
So what gives?
Right now, many correctly think that cannabis stocks, with limited barriers to entry beyond legality, is too competitive a space to be worth dumping tons of cash into individual weed stocks. And that’s true – but doesn’t capture Tilray’s totality.
Instead, Tilray’s move into beverage markets bodes well on two counts: diversification and future positioning.
Diversifying out of core markets isn’t advisable. Last year, the company carved out a significant slice of the craft beer brewing market. The move isn’t just a sign of giving up on the cannabis industry or wider diversification – neither of which are bullish indicators. Instead, Tilray’s acquisition of eight craft beer brands from Anheuser-Busch emerged as a unique differentiator in a flooded field.
With its recent acquisition, Tilray gained established distribution, marketing expertise, and knowledge of legal complexities in the alcohol industry. Beer companies have long mastered custom acquisition strategies, and Tilray smartly acquired decades of this expertise.
This strategic move positions Tilray favorably for its continued emphasis on cannabis-infused beverages. Should cannabis become legalized, Tilray is primed to distribute products through its existing channels quickly.
Tilray’s early market entry positions them to dominate a competitive field from the outset. Given Tilray’s current valuation and meme stock status, it’s hard to see a downside from investment in the cannabis stock today.
Twilio (TWLO)
Twilio (NYSE:TWLO), one of Cathie Wood’s top meme stocks, is well on its way to continuing a 2023 winning streak that pushed shares about 20% higher over the year.
Some short-term shakiness, specifically CEO Jeff Larson’s unpopularity with activist shareholders, put pressure on the stock. But he stepped down earlier this month, paving the way for continued strength.
Twilio exemplifies the successful meme stock template I mentioned above. Though it remains in a growth phase and can’t quite hit profitability, financial strength elsewhere helps keep it afloat as it fights the current economic climate.
Specifically, Twilio’s balance sheet is outstanding. In its most recent quarterly filing, Twilio reported more than $4.7 billion in short-term assets, including $677 million in cash and $3.2 billion in short-term securities. Compare that to Twilio’s low debt load, sitting at just $988 million, and it’s clear Twilio’s past problems haven’t been in the CFO’s office.
The healthy cash cushion preps Twilio for further growth without worrying about total cost control. That growth, which currently includes a 101% net dollar expansion year-over-year, is all but unstoppable as the meme stock keeps rolling.
SoFi Technologies (SOFI)
Earlier this week, I called SoFi Technologies (NASDAQ:SOFI) one of the top bank stocks to sell. Including it on this list of meme stocks to buy might seem contradictory, but it isn’t.
Remember, bank stocks are typified by low-risk value plays that offer dividends and stability. From that investment perspective, SoFi is a hard pitch. But, from a meme stock perspective, SoFi is ready to skyrocket.
The company’s stellar earnings mark an important pivot point for the fintech meme stock. Specifically, it posted its first profit since hitting public markets in 2021.
Investors quickly cycled back into the meme stock, sending shares soaring 20% before settling to around 6% above prior per-share pricing. That reversion to the mean, though, might be the last dip on the table before SoFi goes truly stratospheric.
InvestorPlace’s Luke Lango sums up the bull case for SoFi well and provides a good counterpoint to my bearish tone regarding its balance sheet.
You’ll have to read the full article, but he points to advanced tech, growing platform utilization and member growth, and top executives as factors driving growth. Likewise, he projects 21x returns for SoFi stock by 2030. While we likely won’t hit that before then, buying today is a solid way to capture meme stock momentum through the summer.
Spirit Airlines (SAVE)
Spirit Airlines (NYSE:SAVE) may not seem a typical meme stock, but it became one earlier this month. Meme stock enthusiast Dave Portnoy reported that he “Just Bought A Ton of Spirit Airlines Stock” before advising readers that “I Am Not A Financial Advisor.”
Portnoy may not be offering financial advice, but there’s an undeniable meme upside to this airliner.
Portnoy’s investment followed headline news featuring the acquisition between JetBlue Airways and Spirit. The proposed 2022 deal set the purchase price at $33.50 per Spirit share, though shares traded in the $ 20 range as investors waited for the deal to close.
That gap between $33.50 and $20 highlighted a major opportunity, attracting traders en masse. However, regulatory authorities thwarted these expectations by rejecting the deal based on anti-competitive concerns, causing Spirit’s shares to plummet rapidly.
But Portnoy thinks the stock will rebound alongside other classic meme stocks. He reported buying options at $5.80 per contract and that he “[needs] it to be over 7 bucks by March.” He bases his investment on the theory that “there is a chance this ruling from the court is appealed/overturned or maybe the Gov bails them out again.”
Sounds like classic meme stock due diligence to me.
ChargePoint Holdings (CHPT)
ChargePoint Holdings (NYSE:CHPT) is at the bottom of this meme stock list for a reason. The company’s stock price is in the gutter, and it will take a miracle for the stock to rebound rapidly.
Hopes and prayers are the foundation of meme stock management, and CHPT has better odds than most when it comes to outsized opportunities, considering its dirt-cheap pricing.
ChargePoint is still aggressively expanding its global charging network despite leading the national market. The costs involved in negotiating with landowners and developers while maintaining a diverse array of EV chargers are substantial.
Rising interest rates made debt financing costly, slowing down ChargePoint’s expansion efforts. Additionally, tighter household budgets impeded the trend toward EV adoption.
But the Fed’s rate cut hints could reverse these challenges. Lower car loan rates may boost EV adoption, and ChargePoint’s prudent financial management positions it well for the future.
The company has relied on cash reserves, avoiding its $150 million credit line and deferring its earliest debt repayments to 2028. This strategic approach allows ChargePoint to leverage cheaper debt for expansion if rates drop. Though it’s a gamble that requires all the stars to align perfectly, this EV bet is a solid one if you’re looking for meme stocks.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.