5 Best Meme Stock to Buy in September 2021

There has been a meme stock mania in 2021. While there is no set definition, meme stocks are shares that have seen a lot of attention on social media. These stocks are popular among retail traders and see a sudden spurt in volumes.

While some of the meme stocks are companies with questionable fundamentals and high valuations, some of these look solid companies even as they might be currently out of favor with markets. What are the five best meme stocks that you can buy in September 2021?

1. Virgin Galactic (NYSE: SPCE)

Virgin Galactic stock was listed in 2019 through a reverse merger with one of Chamath Palihapitiya’s SPAC (special purpose acquisition company). The company made the successful space flight with Sir Richard Branson on board. However, the stock has since tumbled from the peaks.

Virgin Galactic looking popular

Virgin Galactic stock has been very popular among retail traders. The company is currently in the pre-revenue stage but would soon start generating sales as it begins commercial flights. Looking at the long-term picture, the outlook for space travel looks positive. Virgin Galactic has already taken the first-mover advantage and its association with Branson, which has expertise in the aviation industry, is another added advantage.

Virgin Galactic believes that the space travel market is worth $900 billion. It intends to focus on the top end of the market which it predicts is about a third of the total market. Jefferies, which initiated coverage on Virgin Galactic with a buy rating and $33 target price expects that the company will generate sales of $440 million in 2025.

Virgin Galactic stock target price

Danielle Shay, director of options at Simpler Trading believes the company is a long-term bet. “With this company in particular, I’m looking at these five to 10 years down the line,” said Shay. She added, “They’re the first in this space, they’re the first people that are actually offering space flights to consumers, and I do believe in the long term [the stock is] going to blow up.”

Shay has put $35 as the first target price for SPCE stock and has forecast that if the stock crosses the level, it could move towards the previous highs. The meme stock had hit an all-time high of $62.80 amid the Reddit-driven rally.

Overall, if you are looking at a meme stock that can give you exposure to the space travel industry, SPCE looks like the best bet. The stock could rise multi-fold from these levels if the space travel market picks up as most analysts are projecting. Overall, Virgin Galactic is among the best meme stocks that you can buy in September 2021.

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2. Clover Health (NYSE: CLOV)

Clover Health also went public by merging with one of Palihapitiya’s SPAC. The stock has had a turbulent ride in its brief history as a publicly-traded company. It fell to all-time lows after Hindenburg Research accused it on multiple counts including hiding material facts from investors. The short seller has issued reports on multiple companies, and there have been top-level exits in at least two, namely Nikola and Lordstown Motors after its accusation.

Clover Health had meanwhile discarded Hindenburg Research’s research. The company’s woes did not end here as it toned down its 2021 projections for almost all the metrics. Several of the analysts also turned bearish on CLOV stock after it lowered the projections.

Meanwhile, after the previous round of short squeeze, CLOV stock is again getting popular on Reddit group WallStreetBets. Markets are speculating on yet another short squeeze in this meme stock.

All said, with US Medicare Advantage expected to double between 2019 to 2025 and reach $590 billion, CLOV could be among the beneficiaries. The health tech company looks among the best meme stocks to buy in September 2021.

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3. Skillz (NYSE: SKLZ)

Skillz is another meme stock that looks like a good buy. It also went public through a SPAC merger and is currently trading a premium of over 25% to the SPAC IPO price. Wall Street analysts are also bullish on the stock. Of the six analysts polled by CNN Business, three rate the stock as a buy while the remaining three rate it as a hold. None of the analysts has a sell rating on the stock.

SKLZ stock upside draws attention

Analysts see massive upside in SKLZ stock and its median target price of $16 is a 27% premium over current prices. Its street high target price is $25 which is a premium of 98% over current prices. The stock’s street low target price of $13 is also 3.3% below the current prices.

The stock has been under pressure after it reported poor earnings. However, it is a long-term play on the gaming market. The company is also looking at international expansion and is considering entering the Indian market.

To be sure, in August, Wedbush Securities and Canaccord Genuity had lowered the target price after the company’s dismal quarterly earnings. Commenting on the earnings, Wedbush analyst Michael Pacher said that “gradual reopening of the economy led to weaker shelter-in-place tailwinds and higher cost-per-install (CPI) rates.”

SLKZ stock look reasonably priced

Overall, while stay-at-home plays including gaming shares have come off their highs, the industry should see secular growth over the next decade. The crash in SKLZ stock looks like a buying opportunity and it looks among the best meme stocks to buy in September 2021.

The stock’s valuation multiples look reasonable and it trades at an NTM (next-12 months) EV (enterprise value)-to-sales of 9x which is less than a third of what the multiple has averaged since the company listed. While some of the meme names like AMC Entertainment and GameStop trade at valuations that can’t be justified, at least by traditional valuation mechanism, SLKZ is a reasonably valued meme stock. Notably, Cathie Wood of ARK Invest, who has built her reputation by identifying names like Tesla and Square early, has also been buying SKLZ stock for ARK ETF

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4. ContextLogic (NYSE: WISH)

ContextLogic is another meme stock that could be a good buy for the long term. The company is an e-commerce platform and went public last year pricing the shares at $24. The stock now trades at $7.38 and is not far from the 52-week lows of $6.14.

Apart from a sell-off in growth names, several company-specific factors have also led to a crash in WISH stock. The company’s second-quarter earnings were a big disappointment and it reported a yearly fall in revenues. Its losses were also higher than what the markets were expecting. The company’s CFO Rajat Bahri also resigned in July which further added to the pessimism.

WISH reported disappointing earnings

After WISH’s second-quarter earnings, several analysts had downgraded the stock. William Blair downgraded the stock to equal weight. “Since its IPO, reported results have missed Street expectations (and our model) across key engagement metrics (i.e., MAUs) for three consecutive quarters,” said William Blair analysts in their note. They added, “Given both macroeconomic headwinds and company-specific headwinds specific to user engagement and retention, we do not have good visibility into our forecast.”

Loop Capital also lowered WISH’s target price from $20 to $15 while retaining its buy rating. Citigroup and Stifel Nicholas also lowered the stock’s target price to $7.5 and $8 respectively.

WISH growth going strong

There are strong secular growth trends in the e-commerce market. WISH has changed its business strategy and instead of only focusing on growth, it is now focusing on retaining the existing customer base. The efforts would pay off in the long term. The stock looks among the best meme stocks to buy and bet on the e-commerce industry.

While there are several challenges for the company, it currently trades at an NTM EV-to-sales multiple of 1.6x which looks attractive considering the multiples of other e-commerce companies.

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5. Senseonics (NYSE: SENS)

Senseonics is also among the best meme stocks to buy in September 2021. The company produces the Eversense CGM (continuous glucose monitoring) system which is an implantable device. The market for diabetic care is expanding fast.

Currently, the Eversense CGM has to be implanted every 90 days. The company has applied with the FDA to increase the life to 180 days. If the FDA grants the approval, it will help lift SENS stock. The Eversense CGM can potentially transform the diabetic care market.

SENS expected to rise fast

The CGM market is expected to rise at an annual pace of 12.7% between 2020 and 2027 according to Grand View Research. It forecasts the market to reach $10.4 billion by 2027. The successful commercialization of Eversense could make SENS stock a multibagger.

Wall Street analysts have a mixed opinion of SENS stock and it has three buys, three holds, and three sell ratings. Its median target price of $3.5 is a discount of almost 10%. However, the street high target price of $6 implies an upside of almost 55%.

Overall, SENS looks like a meme stock worth betting on. The stock has risen four-fold this year and if the CGM product gains traction, it could deliver even more returns for investors.

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