In this article, we will take a look at the 12 stocks with biggest upside potential according to analysts. To skip our analysis of recent market trends, you can go directly to 5 Stocks with Biggest Upside Potential.
The stock market has been in constant turmoil during the last few years. The markets were severely impacted by the coronavirus pandemic especially in the first half of 2020. As signs of recovery started to pop up and market sentiment started improving, the global economy was sent into another challenge with the onset of the Russia-Ukraine crisis. The situation for stock markets was further exacerbated with the interest rate hikes implemented by central banks across the globe to curtail inflation.
Growth companies and companies working on disruptive technologies were hit hardest by the market conditions as the cost of capital rose significantly in a short period of time. Catherine Wood’s ARK Innovation ETF (ARKK) that invests in domestic and foreign equity securities of companies that are working on “disruptive innovation”, lost nearly 67% of its value in 2022. The top three holdings of the ETF are Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Roku, Inc. (NASDAQ:ROKU), respectively.
Even in times of such prevalent despondency, there are plenty of good options to invest in the stock market. The biotechnology sector, especially clinical stage biotechnology companies, are a good bet in the short to medium term, according to analysts. Majority of the stocks on our list belong to biotechnology companies that are working on novel therapies for the treatment or prevention of rare diseases. Some of these companies are in the late stage of product development with the potential to be the first to produce viable therapies for their respective diseases.
The biotechnology sector has also faced slashed valuations within the rising interest rate environment. SPDR S&P Biotech ETF which emulates the S&P® Biotechnology Select Industry Index, lost more than 8% of its market value during Q1 2023. After such a dismal performance in the first quarter, the sector has recently been on an uptrend with a recovery of more than 9% as of July 25. Analysts are bullish about the prospects of companies in this sector, especially the ones that have made it onto our list of 12 stocks with biggest upside potential according to analysts.
Our list of stocks with biggest upside potential includes Vir Biotechnology, Inc. (NASDAQ:VIR), AbCellera Biologics Inc. (NASDAQ:ABCL), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), and Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), among others.
We used stock screeners to shortlist companies with upside potential based on average analyst target price estimates of more than 50%. We further filtered the list to remove companies with market capitalizations of less than $1.0 billion as these companies aren’t generally widely covered by leading wall street analysts. We also filtered the companies which had been covered by less than 5 analysts in the last 90 days. The remaining stocks on the list were ranked based on the upside potential according to average analyst target price estimates.
12 Stocks with Biggest Upside Potential According to Analysts
Replimune Group, Inc. (NASDAQ:REPL) is a clinical stage biotechnology company focused on the development of a novel class of tumor-directed oncolytic immunotherapies derived from its RPx platform.
The lead product candidate of Replimune Group, Inc. (NASDAQ:REPL) is RP1 which is based on a proprietary new strain of herpes simplex virus engineered and genetically armed with a fusogenic protein.
On June 6, Replimune Group, Inc. (NASDAQ:REPL) released initial data from a Phase 1/2 trial evaluating RP1 for the treatment of cutaneous malignancies in patients who have had a kidney, liver, heart, lung, and/or a hematopoietic cell transplant. RP1 showed meaningful anti-tumor activity.
On June 15, JP Morgan analyst Anupam Rama raised the price target on Replimune Group, Inc. (NASDAQ:REPL) shares $50 from $38 and maintained an ‘Overweight’ rating for the shares. The target price represents a potential upside of nearly 134% based on the share price on July 20.
Kymera Therapeutics, Inc. (NASDAQ:KYMR) is a clinical stage biopharmaceutical company focused on discovering and developing novel small molecule therapeutics that selectively degrade disease-causing proteins by harnessing the body’s own natural protein degradation system.
To date, Kymera Therapeutics, Inc. (NASDAQ:KYMR) has used its proprietary targeted protein degradation platform, called Pegasus, to design novel protein degraders focused in the areas of immunology-inflammation and oncology.
On June 30, Truist analyst Srikripa Devarakonda initiated coverage of Kymera Therapeutics, Inc. (NASDAQ:KYMR) with a ‘Buy’ rating a price target of $50 per share.
As of Q1 2023, 14 of the 943 hedge funds tracked by Insider Monkey were long Kymera Therapeutics, Inc. (NASDAQ:KYMR) shares, for a total value of $503 million. Mark Lampert’s Biotechnology Value Fund / BVF Inc was the largest hedge fund shareholder with ownership of 4.74 million shares valued at $140 million.
Shanghai, China-based Zai Lab Limited (NASDAQ:ZLAB) is a commercial-stage, global biopharmaceutical company focused on medicines for oncology, autoimmune disorders, infectious diseases, and neurological disorders.
The product portfolio of Zai Lab Limited (NASDAQ:ZLAB) comprises of five commercialized products, including Zejula® for ovarian cancer, Optune®, Qinlock®, NUZYRA®, and VYVGART®. In addition, its product pipeline includes potentially global best-in-class and/or first-in-class therapies, including 13 in late-stage development.
As of March 31, Zai Lab Limited (NASDAQ:ZLAB) shares were held by 21 hedge funds with the total shares held by these hedge funds valued at $251 million. Andreas Halvorsen’s Viking Global was its largest hedge fund shareholder with ownership of 2.33 million shares valued at $78 million.
9. Hesai Group (NASDAQ:HSAI)
Number of Hedge Fund Holders: 13
Upside Potential as of July 20: 160.33%
Shanghai, China-based Hesai Group (NASDAQ:HSAI) is a leading light detection and ranging (LiDAR) solutions provider. Its LiDAR products are used in passenger and commercial vehicles with advanced driver assistance systems (ADAS) and autonomous vehicle fleets as well as last-mile delivery robots and logistics robots.
Hesai Group (NASDAQ:HSAI) has established partnerships with leading automotive OEMs, autonomous vehicle, and robotics companies worldwide, covering over 90 cities in 40 countries. The shares of the company started trading on the NASDAQ on February 10, 2023, and have since lost nearly 53% of their value.
On May 24, Hesai Group (NASDAQ:HSAI) released its financial results for Q1 2023. Its revenue increased by 73% y-o-y to $63 million. It shipped nearly 35,000 LiDAR units during the quarter, an increase of 403% y-o-y, by utilizing its in-house manufacturing facilities.
Based in South San Francisco, California, Pliant Therapeutics, Inc. (NASDAQ:PLRX) is a clinical-stage biotechnology company focused on discovering and developing novel therapeutics for the treatment of fibrosis.
The lead product candidate of Pliant Therapeutics, Inc. (NASDAQ:PLRX), bexotegrast, is an oral small molecule dual selective inhibitor that is in development in the lead indications for the treatment of idiopathic pulmonary fibrosis (IPF). Bexotegrast is currently in Phase 2a trial for primary sclerosing cholangitis (PSC) while the company is planning a Phase 2b trail in IPF for the drug.
On May 18, Canaccord Genuity analyst Edward Nash initiated coverage of Pliant Therapeutics, Inc. (NASDAQ:PLRX) with a ‘Buy’ rating and a price target of $48 per share.
As of Q1 2023, Pliant Therapeutics, Inc. (NASDAQ:PLRX) shares were held by 32 prominent hedge funds with the total value of shares held by hedge funds valued at $539 million. David Kroin’s Deep Track Capital was the largest hedge fund shareholder on record with ownership of 3.4 million shares valued at $91 million.
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is a leading late stage biotechnology company focused on the development of genetic therapies designed to correct the root cause of complex and rare childhood disorders.
Clinical programs of Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) include multiple gene therapies targeting Fanconi Anemia, Leukocyte Adhesion Deficiency-I, Pyruvate Kinase Deficiency, Danon Disease, and Infantile Malignant Osteopetrosis.
On June 8, Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) announced that the FDA had granted Fast Track and Orphan Drug designations to the company’s gene therapy candidate for the treatment of plakophilin-2 related arrhythmogenic cardiomyopathy.
On May 5, Chardan Capital lowered the price target on Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) shares to $61 from $63 but maintained a ‘Buy’ rating for the shares.
Waltham, Massachusetts-based Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) is a biopharmaceutical company focused on the development of therapies for treatment of debilitating diseases by controlling complement, part of the body’s immune system. The company is exploring programs across ophthalmology, nephrology, hematology, and neurology by targeting the C3, the only target in the complement cascade that addresses all three pathways that can drive disease.
Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) received FDA approval of SYFOVRE™ (pegcetacoplan injection) in February 2023 for the treatment of geographic atrophy. EMPAVELI, for the treatment of Paroxysmal Nocturnal Hemoglobinuria, is the other commercial product of the company.
On May 4, Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) released its financial results for Q1 2023. Its revenue increased by 212% y-o-y to $45 million while net loss increased by 30% y-o-y to $178 million.
As of Q1 2023, Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) was the most commonly held stock out of the 12 stocks with biggest upside potential according to analysts. Its shares were held by 42 of the 934 prominent hedge funds tracked by Insider Monkey with a total value of $2.0 billion.
