There have been several multibagger stories among growth stocks in the last few years. However, the broad index movement indicates that the last few years have been challenging for growth stocks. It’s therefore relatively easy to spot undervalued growth stocks.

If we look at the optimistic side of things, it’s the best time to accumulate undervalued growth stocks. Throughout the history of stock markets, there have been phases of euphoria and fear. Once sentiments reverse, several growth stocks are poised to deliver multibagger returns.

Of course, I would not blindly buy any stock that has corrected steeply. Careful screening of fundamentally strong growth stories will boost portfolio returns.

Let’s talk about three undervalued growth stocks that are poised to double.

Nio (NIO)

Nio (NYSE:NIO) stock has witnessed a steep correction of 52% in the last 12 months.

I believe that the stock is deeply undervalued and a sharp reversal seems imminent. It’s worth noting that Tesla (NASDAQ:TSLA) is already higher by 87% for year-to-date 2023. Sentiments change at the blink of an eye.

One reason for Nio stock correction is the end of subsidies by the state for EV purchases in China. This has impacted sales volumes. However, the factor is already discounted in the stock.

Recent news indicates that Nio is planning a new factory to build EVs for export to Europe. The idea is to build budget EVs under a new brand. While EBITDA margin will potentially decline, car deliveries will accelerate considering the pricing advantage.

I like the fact that Nio has a diversified car offering. Currently, the company has eight models with another five due for launch in 2023. New models coupled with international expansion are deliveries growth catalysts. The company also plans to add 1,000 battery-swapping stations in 2023.

Overall, business developments remain positive and I expect NIO stock to witness a sharp reversal rally.

Coupang (CPNG)

Amidst some volatility, Coupang (NYSE:CPNG) stock has been in a consolidation mode in the last few months. CPNG stock looks undervalued and I expect the e-commerce name to double in the next two quarters.

Later this month, Coupang is expected to report Q4 2022 earnings. That’s a potential catalyst for a breakout on the upside. For Q3 2022, Coupang reported revenue of $5.1 billion. On a year-on-year basis, revenue increased by 10%.

However, the key highlight of the results was an adjusted EBITDA margin of 4.8% for the product commerce division. With operating leverage, it’s likely that EBITDA margins will continue to improve. Coupang has guided for an adjusted EBITDA margin in the range of 7% to 10%.

From the perspective of revenue growth, the Korean e-commerce market was valued at $196 billion in 2021. The market size is expected to swell to $291 billion by 2025. This leaves ample headroom for growth within Korea. Coupang has also been exploring entry into Southeast Asian markets.

Lithium Americas (LAC)

Lithium Americas (NYSE:LAC) is another attractive name among growth stocks to buy. LAC stock has remained largely sideways in the last 12 months. However, with positive business developments, the stock seems poised for a meaningful rally.

A major development for Lithium Americas announced a $650 million investment from General Motors (NYSE:GM). The partnership is for the joint development of the Thacker Pass project. Just to put things into perspective, the asset has a mine life of 40 years and an average annual EBITDA visibility of $1.18 billion.

Lithium Americas also has a 44.8% stake in the Cauchari-Olaroz project in Argentina. This asset has an average annual EBITDA visibility of $308 million. Lithium Americas has announced the split of international assets into a separate entity (Lithium International). The impending split is likely to unlock value.

Overall, LAC stock is a potential multibagger. Considering the demand-scenario supply for lithium, positive tailwinds will sustain well beyond the decade.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.