We recently published a list of 12 Best Growth Stocks to Invest In According to Analysts. In this article, we are going to take a look at where Summit Therapeutics Inc. (NASDAQ:SMMT) stands against other best growth stocks to invest in according to analysts.
Companies experiencing above-average earnings growth, which is often fueled by innovations and market expansions, are known as growth stocks. However, investing in them requires more than just chasing their rising share prices. These companies typically command higher valuations than their peers, which reflects investor confidence in their future potential. While they offer the prospect of substantial returns, they also come with heightened volatility and are susceptible to economic pressures like inflation and supply chain disruptions. Despite recent market fluctuations, periods of decline can present strategic entry points for long-term investors.
On February 20, Adam Crisafulli, Vital Knowledge founder, and Ryan Detrick, Carson Group chief market strategist, joined ‘Closing Bell Overtime’ on CNBC to discuss the state of the market. Detrick addressed the broadening nature of the market and the lack of panic following recent Fed minutes. He noted that all 11 sectors have increased year-to-date, with 7 sectors outperforming the S&P 500. Detrick highlighted that after two consecutive years of over 20% gains, the market has continued its upward trajectory, showing an increase of over 4%, almost 5%, so far this year. He emphasized that surprises in a bull market typically lean towards positive outcomes and reiterated that the ongoing rotation among sectors is beneficial for investors because it allows for a diversified portfolio.
Crisafulli then shifted the focus to specific companies which are set to report earnings. He connected these companies to trends in digital payments and marketing, emphasizing the role of data in driving customer loyalty and business growth in a modern economy. He discussed a broader theme of valuation reversion among high-multiple stocks and suggested that cheaper segments of the market are starting to catch up in terms of valuation expansion. Detrick added to this by discussing record highs for major indexes such as the S&P 500 and NASDAQ 100, as well as European indices like the DAX and Stoxx Europe 600. He also mentioned gold trading at record levels and questioned whether it is wise to invest at these heights or if the opportunity has passed. Detrick explained that they incorporated gold into their tactical models back in March 2023, adding more during a pullback post-election when the dollar rose sharply. He attributed gold’s rise to central bank indecision and suggested that the US dollar may have peaked. He advocated for including gold in a diversified portfolio, particularly within a 60-40 asset allocation model.
The overall discussion underscored the importance of diversification in investment strategies amidst changing market dynamics.
Methodology
We used stock screeners to compile a list of the top growth stocks. We then selected 12 stocks that had high average upside potential of over 30% and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Summit Therapeutics Inc. (SMMT) the Best Growth Stock to Invest In According to Analysts?
A laboratory employee in a sterile environment inspecting a microscope focused on a Clostridioides difficile infection sample.
Summit Therapeutics Inc. (NASDAQ:SMMT) develops innovative therapies that prioritize patient, physician, and caregiver needs. With a focus on oncology and infectious diseases, its lead candidate, Ivonescimab, targets cancer immunotherapy. Its antibiotic portfolio, including SMT-738, addresses multidrug-resistant infections. This shows a commitment to tackling critical medical challenges.
The company is heavily invested in ivonescimab, which is a novel bispecific antibody. It targets both PD-1 and VEGF, showing promise in treating non-small cell lung cancer (NSCLC) and other solid tumors. In the HARMONi-2 trial, ivonescimab demonstrated a 49% reduction in disease progression compared to pembrolizumab. The company is actively pursuing nine Phase 3 trials, six of which focus on NSCLC, with the aim to establish ivonescimab as a leading treatment. Clinical trials are progressing rapidly. Enrollment for the HARMONi trial in EGFR-mutated NSCLC is complete, with top-line data expected mid-2025. The HARMONi-3 trial is being amended to include non-squamous NSCLC, significantly expanding the patient pool.
Summit Therapeutics Inc. (NASDAQ:SMMT) ended Q3 2024 with $487 million in cash, boosted by a $235 million private placement. The company is efficiently managing its cash burn, keeping it below $35 million per quarter. Clinical operations are accelerating, with increased enrollment following positive data releases. It’s focused on completing its Phase 3 trials and expanding ivonescimab’s application to other cancer types.
Overall, SMMT ranks 4th on our list of best growth stocks to invest in according to analysts. While we acknowledge the growth potential of SMMT), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
