Top 3 High-Risk, High-Reward Plays for Bullish Investors

Key Points

• Investors optimistic about the market in 2025 may choose to take a bigger risk on some less-established names with the potential for significant returns.
• Three companies in this category are Blue Bird, UiPath, and Zeta Global Holdings.
• Blue Bird is a maker of electric school buses, UiPath offers automation software to businesses, and Zeta Global operates a platform using AI to develop consumer insight.

The old adage that stock prices tend to rise early in the year after a slump in the final weeks of the preceding year—the so-called January effect—is not necessarily true in general and certainly not the case for every single company. Still, many investors approach a new year with a reinvigorated sense of optimism, and this exuberance can sometimes lead them to take on higher-risk bets in the hopes of earning a more significant reward.

Besides general optimism around the start of 2025, many investors are particularly bullish due to the potential for a relaxed regulatory environment, favorable corporate tax policies, and continued economic momentum this year. Whatever the reasons for bullishness, optimistic investors might look to any number of companies that are not well-established but nonetheless offer exciting, if uncertain, growth prospects. Three notable examples include Blue Bird Corp. NASDAQ: BLBD, UiPath Inc. NYSE: PATH, and Zeta Global Holdings Corp. NYSE: ZETA.

Blue Bird: Hitting on All Cylinders

Blue Bird designs and builds school buses and related components, with a particular focus on vehicles powered by alternative energy sources and electric buses. 2024 was a breakout year for the company, as shares more than doubled from the beginning of the year through an all-time high in June. However, in the last six months, the company has given up some of those gains, with the stock declining by more than 16% in the six months leading to January 9, 2025.

There are many reasons to expect Blue Bird to thrive in the new year. The company posted record revenue of $350.2 million for the most recent quarter on a 16.5% year-over-year increase in units sold. Adjusted EBITDA of $41 million was $1 million greater than the prior-year period and a fourth-quarter record. Based on these results, the company increased its guidance. Continued robust market demand, a stable supply chain, and healthy increases in both bus prices and backlog may also help to drive performance in the year ahead.

Analysts expect 44.2% upside potential for BLBD shares based on a consensus price target of $60.64.

UiPath: Revenue Gains But Mounting Challenges

UiPath is a software developer specializing in robotic process automation (RPA), technology used to automate tasks for other businesses so that they can be accomplished without human intervention. RPA is a fast-growing branch of the AI industry and one that is not yet fully consolidated. UiPath is an emerging leader in this space based on recent results—for the latest quarter (the third quarter of the company's fiscal 2025, ended in October 2024), revenue climbed by 9% year-over-year to $355 million and annualized renewal run-rate (ARR) surged by 17% to $1.6 billion.

UiPath is not yet consistently profitable, although its revenue has continued to climb despite increasing challenges for major players in the tech space. As a perk for investors, UiPath has used profits when it has them available to repurchase shares.

2025 is likely to be a critical year for UiPath in its journey toward dominance in the RPA sphere. Analysts are cautiously optimistic—though the firm has a Hold rating, the consensus price target of $17.50 is more than 34% above current share price levels as of January 10, 2025.

Zeta Global: Major Growth, But Also Legal Challenges

Zeta Global is the company behind Zeta Marketing, a platform using machine learning and other AI tools to develop consumer insight and marketing tools. The platform has grown substantially in popularity; in early December 2024, the company announced a 108% increase in platform usage year-over-year. The company enjoys a Moderate Buy rating with a consensus price target more than twice the current share price level, based on a series of optimistic analyst ratings in the last several weeks of 2024.

On the other hand, Zeta Global also faces a class action lawsuit alleging securities fraud between February and November 2024. For this reason, ZETA may represent the largest risk of the three companies on this list. However, investors who are bullish about the company's ability to use AI to transform consumer profiling and directed marketing may not find it to be an insurmountable barrier.