Among market participants, there are optimists and pessimists. The former are often eternal bulls while the latter often paint doomsday scenarios on any macroeconomic event. However, it’s usually best to take the middle path and be a realist. If I look at the current markets, a realistic assessment will be that uncertainties will prevail in 2023. However, there are growth stocks to buy that trade at seriously undervalued levels, even at this point in the market.

As a realist, I would remain overweight blue-chip stocks. The world might be staring at a recession in 2023. Having said that, markets are a leading indicator. Growth stocks seem to have discounted macroeconomic concerns and its implication on future earnings potential.

In 2021, several growth stocks delivered multibagger returns in a matter of few months. As a realist, I don’t expect a repeat to take place in 2023. However, I do think that there are seriously undervalued growth stocks to buy with the potential to surge 100% over the next 12 months.

Let’s talk about three growth stocks to buy that are poised for a sharp reversal rally.

Lucid Group (LCID)

Lucid Group (NASDAQ:LCID) stock, at $10, looks like an attractive bet for 2023. The company disappointed investors in 2022 with a weak production guidance. Furthermore, equity dilution has contributed to the stock’s decline.

Things are likely to be different in 2023 with Lucid fully-financed through 2024. The company already has reservations of 34,000 cars. Accordingly, considering that production tripled on a quarter-on-quarter basis in Q3 and supply chain challenges are set to ease on a relative basis, production growth is likely to sustain. Currently, Lucid has an installed production capacity of 34,000 vehicles annually.

Lucid has been expanding aggressively in Europe, and its first factory outside North America is also under construction in Saudi Arabia. Notably, Lucid also has an order backlog of 100,000 EVs from the Saudi government through 2030. With the Lucid Air Sapphire and Project Gravity SUV in the pipeline in the next 24 months, the company’s growth outlook is bright. I would therefore not be surprised if LCID stock makes a sharp reversal from current levels.

Tilray Brands (TLRY)

With federal legalization of cannabis a possibility in 2023, Tilray Brands (NASDAQ:TLRY) is another high-conviction growth stock to buy. Even if we leave aside the legalization catalyst, TLRY stock is undervalued.

In a recent positive development, President Biden signed the marijuana research bill into law. This will allow researchers to study the potential benefits of marijuana in medicine. As a matter of fact, it’s the first stand-alone federal cannabis reform measure in more than 50 years.

Tilray is targeting $4 billion in revenue by 2024. In a scenario where cannabis is legalized, this certainly seems realistic. The company’s CEO believes that the U.S. is a $100 billion cannabis market. Additionally, Tilray expects all business units to be free cash flow positive in the current financial year. This is another positive financial development, as several cannabis companies struggle with significant cash burn.

It’s worth noting that Tilray has already made inroads in the U.S. markets with the acquisition of two brewing companies. This should help the company create a robust strategic infrastructure for growth acceleration, when legalization materializes.

Coupang (CPNG)

The e-commerce sector has been among the hardest-hit in 2022. Much of the valuation compression e-commerce stocks saw has been due to a growth deceleration in this post-pandemic era. However, Chinese e-commerce stocks remain unattractive due to regulatory and growth headwinds. That said, in the Asian e-commerce space, Coupang (NYSE:CPNG) is one undervalued stock that has positive catalysts heading into 2023.

The most important factor bulls can rely on with CPNG stock is the company’s EBITDA profitability. For Q3 2022, Coupang reported adjusted EBITDA of $195 million and an EBITDA margin of 3.8%. The profitability turnaround with Coupang has been significant, and it’s likely that margin improvement will continue in 2023. In March 2022, the company had guided for long-term EBITDA margin in the range of 7% to 10%.

It’s also worth noting that Coupang reported 10% revenue growth in Q3 on a year-over-year basis. There are two possible triggers for revenue acceleration. First, the company believes that its active customers are 50% of Korean online shoppers. There is ample scope for growth within Korea.

Secondly, Coupang is already expanding in other Asian countries. I would like to add that the trend in average revenue per user has been positive. This is another factor that will support revenue growth and margin expansion.

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.