This under-the-radar stock overtook Bitcoin in 2021 – is it a smart buy right now?

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Even with its otherworldly volatility, Bitcoin (CRYPTO: BTC) has been one of the best investments to own over the past few years. And in 2021, that theme continued, as the most valuable cryptocurrency has climbed nearly 70% this year.

Risk averse investors who avoid this burgeoning asset class might instead want to own real companies that offer them the potential for outsized returns. In this case, look no further than The Joint Corp. (NASDAQ: JYNT). In fact, this national franchisor of chiropractic clinics even outperformed Bitcoin, up a remarkable 150% in 2021.

Does the joint. Do the shares of the company seem like an attractive opportunity to you today? Let’s find out.

Image source: Getty Images.

Treating back pain on a large scale

As of September 30, the company had a total of 666 locations, of which 583 were franchised and 83 were company-owned. What separates The Joint Corp. of traditional chiropractors is that the former only provides basic back adjustments. The sessions do not require an appointment and only take a few minutes. There is no expensive equipment, and because patients do not need insurance, there is no need for administrative staff either.

While revenues will not grow as they have in the past (system-wide sales soared 70% per year from 2010 to 2020), investors can still expect big gains. as the business continues to grow. The gross margin is just under 90%, as operating a small cap franchise model is extremely lucrative.

There are some clearly positive indicators that bode well for The Joint Corp’s long-term outlook. Data from Google Trends shows that searches for “chiropractors near me” have increased over the past five years. What’s more, a 2020 Centers for Disease Control and Prevention study found that 25% of American adults had experienced back pain in the past three months.

As the nation’s immunization rate rises and people feel comfortable seeing a chiropractor for their back pain, The Joint Corp. will be there to deal with them. Not only does the chiropractic care market generate $ 18 billion in annual revenue, 50% of Americans don’t even know what the word “chiropractic” means. A strong momentum, supported by what I believe is the growing interest of the general public in health and wellness, will propel this company into the coming year and beyond.

By 2023, management expects 1,000 clinics to be open. And they see the potential of 1,800 locations in the United States someday. This means that the company’s profitability, which has accelerated in recent years, could be considerably higher in the not-so-distant future. It is a key ingredient when it comes to getting overwhelming returns for the market.

The stock is down sharply in recent months

Since the release of third quarter financial results on Nov. 4, the stock has fallen almost 32% (as of Dec. 15). The Russell 2000, a small cap index, lost only 9% over the same period. Although The Joint Corp. posted a 36% year-over-year increase in revenue in the third quarter, a significant drop from the 61% jump in the previous quarter. I think this sequential deceleration scared off investors.

And uncertainty about the ongoing pandemic and the omicron variant, mixed with the oft-discussed topics of inflation and the Fed’s next move, results in high-growth names being unusually hammered. The Joint Corp. is not immune to the latest vagaries of the market.

The Joint Corp. Will it surpass Bitcoin again in 2022? Your guess is as good as mine. But I think investors would be smart to take advantage of the recent drop in prices and consider buying stocks in this rapidly growing sector. I know I will be.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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