When searching for massive gains that can be achieved in the blink of an eye, look no further than the healthcare industry. These companies often rely on only a few critical indicators such as trial data or Food and Drug Administration approvals. To many healthcare stocks these are arguably more important than earnings results. A favorable outcome can signal life-sustaining revenues are on the way and the good news can send shares on a rapid upward climb.
It should be noted that the opposite also holds true, making these stocks riskier plays than others. That’s why Wall Street pros say to proceed with caution when approaching investment opportunities in this space, telling investors to do their homework and focus on the names backed by the analysts.
To put that advice into action, I suggest turning to TipRanks, a company that tracks and measures the performance of analysts. Using TipRanks’ Stock Screener tool, I was able to filter my search results to narrow down the crème-de-la-crème of the healthcare sector according to Wall Street analysts. These are the names that boast significant upside potential from current levels and have also received only Buy ratings recently.
Here are the seven healthcare stocks with 100% Street support.
Healthcare Stocks to Buy: Alphatec (ATEC)
Med tech company Alphatec (NASDAQ:ATEC) prides itself on its commitment to delivering innovative, safe and effective products for spine surgeries. With it already posting a whopping 317% gain over the last twelve months, is its growth story coming to an end?
Not according to Lake Street analyst Brooks O’Neil. Citing the company’s preliminary fourth-quarter results announced on Jan. 13, the analyst counts himself as very much impressed. ATEC forecasts that Q4 2019 sales will land within the range of $32 million to $32.4 million, with full year 2019 sales expected to come in between $113.1 million to $113.5 million. These figures reflect year-over-year sales growth of 34% to 36% and 29% to 30%, respectively.
Adding to the good news, management provided “encouraging” 2020 U.S. revenue guidance, stating that the figure could reach $128 million to $131 million, a possible increase of 19% to 21% from 2019. The eight to ten new product launches as well as its products released in 2019 like the SafeOp Neural InformatiX System, which are expected to continue gaining a foothold, could drive this substantial growth.
All of this prompted O’Neil to comment, “there is plenty of gas in the tank and we believe this journey is just beginning,” in addition to stating that its new informatics platform has already been well received. With this in mind, the five-star analyst attached an increased price target of $15 along with a Buy rating. Should the target be met, shares will be in for a 102% rise in the year ahead.
Turning now to the rest of the Street, three other analysts have reviewed the stock over the last three months, all deeming it as a Buy. As a result, the consensus rating is a Strong Buy. See the ATEC stock analysis.
Despite facing headwinds in the last few months, the analyst community remains fully behind Geron (NASDAQ:GERN). The biopharma company, which focuses on developing a telomerase inhibitor, imetelstat, in hematologic myeloid malignancies, has shown significant progress since then, with shares posting a 4% gain since the start of 2020.
Back in September, some investors raised red flags after Janssen Biotech announced that it would be stopping its 2014 Collaboration and License Agreement (CLA) with GERN due to a strategic portfolio evaluation and prioritization of assets. That being said, the termination of the collaboration gave GERN the global rights to develop imetelstat.
Based on early clinical data, the inhibitor has already demonstrated its potential to produce disease-modifying activity that could enable the recovery of normal hematopoiesis. The implications of imetelstat as a possible treatment for transfusion-dependent anemia, as well as myelodysplastic syndrome and myelofibrosis, haven’t gone unnoticed, with it receiving FDA Fast Track designation for use in anemia.
While acknowledging that the discontinuation of its joint development efforts with Janssen drove a trade overhang, B. Riley FBR analyst Andrew D’Silva argues that biopharma has “significantly advanced” since then. He adds that imetelstat’s possible ability to treat myelodysplastic syndrome and myelofibrosis hasn’t fully been built into the share price.
It shouldn’t come as a surprise, then, that D’Silva resumed his coverage with a Buy rating and set a $4 price target. This puts the upside potential at a huge 184%.
As for other Wall Street analysts, they wholeheartedly agree that GERN’s long-term growth prospects look strong, with the consensus rating landing at a unanimous Strong Buy. See the GERN stock analysis.
Inovio Pharmaceuticals (INO)
Inovio Pharmaceuticals (NASDAQ:INO) wants to find new treatments and even prevent cancer and other infectious diseases using its novel immunotherapies. Its platform is unique in that it can use DNA as well as antigen sequencing and delivery in order to activate the immune system, with its therapies functioning exclusively in vivo.
After a series of meetings with management, Piper Sandler’s Christopher Raymond tells investors that he walked away even more confident in the company’s long-term growth prospects. Noting that he is “incrementally positive,” he does point out that it “has been a work in progress” for INO in terms of its recent execution and adherence to a timeline.
The five-star analyst argues that the stock doesn’t fully reflect the value of its expansive development effort, citing no less than four data readouts and other catalysts this year that he believes others don’t expect to be favorable or just aren’t aware of. While he says that “any inkling” of proof of concept could lend itself to substantial gains, he highlights its VGX-3100 candidate for cervical dysplasia as being especially promising.
As a result, Raymond left the Overweight rating as well as the $8 price target unchanged, implying 143% upside potential.
What does the rest of the Street have to say? Like Raymond, other analysts side with the bulls. With six Buy recommendations given in the last three months compared to no Holds or Sells, the message is clear: INO is a Strong Buy. Not to mention the $9.83 average price target puts the potential twelve-month gain above Raymond’s forecast at 199%. See the INO stock analysis.
This biopharma is a player in the rare and serious disease space, with Insmed (NASDAQ:INSM) working to address the medical challenges that patients face on a daily basis. Even though the company has kicked off 2020 on a rocky note, members of the Street are buzzing about its potential in the upcoming year.
Ahead of the release of its Phase 2 WILLOW study results for INS1007, Credit Suisse analyst Martin Auster stated that there’s a positive risk-reward skew for the program. Also highlighting the “solid optionality” on the new data, he points to peak sales of $1 billion should it be successful as well as a share upside of $8 to $10.
Therefore, Auster’s bullish thesis remains very much intact, with the analyst reiterating an Outperform call along with the $40 price target. At this target, the potential twelve-month climb lands at 86%.
Meanwhile, JMP Securities’ Liisa Bayko tells clients that it’s the geographic expansion on top of upcoming data readouts that’s getting her excited about INSM’s 2020 prospects. Additionally, she thinks 2020 will see Arikayce sales continue to exceed expectations. With this in mind, the analyst left the Outperform rating as is. At $40, Bayko’s price target matches that of Auster’s.
Out of six analysts that have published reviews in the last three months, all were bullish, making the consensus rating a Strong Buy. Adding to the good news, the $43 average price target brings the upside potential to 100%. See the INSM stock analysis.
BioDelivery Sciences (BDSI)
Using its proprietary BioErodible MucoAdhesive (BEMA) technology as well as other methods of drug delivery, BioDelivery Sciences International (NASDAQ:BDSI) is finding new treatments to address the unmet need of patients with chronic conditions. With three drugs already on the market as well as additional research being conducted, 2020 could be a big year for the healthcare name.
Part of the interest surrounding the company is related to its best-selling drug, Belbuca. The therapy uses a long-acting opioid medication, which unlike other opioids, only needs to be taken every twelve hours and can be used to help manage severe pain. It should be noted that as the drug is still an opioid, it’s classified as a Schedule 3 drug by the U.S. Drug Enforcement Administration (DEA), meaning that there is a risk of developing an addiction.
Piper Sandler analyst David Amsellem pointed out that the drug has already been well received, with it likely to fuel significant growth for BDSI. As a result, he maintained an Overweight recommendation alongside the $9 price target, suggesting 54% upside potential.
He commented, “We believe that visibility into aggressive volume/sales growth for top-seller Belbuca, BDSI’s buccal film form of buprenorphine for chronic pain, is high, translating into transformative longer-term EBITDA growth. The product is hitting its stride following some fits and starts early in its commercial life. We believe that this is a function of strong execution on the payer front (chronic pain being a heavily contracted category) and the opioid crisis reaching a lamentable crescendo of sorts, driving more cautious prescribing behavior by physicians (bearing in mind that buprenorphine is a schedule III product).”
As for the four other analysts that have thrown their hats into the mix, they also see the stock as a Buy. Naturally, then, the consensus rating comes in as a Strong Buy. Given the $8 average price target, shares could rise 37% over the next twelve months. See the BDSI stock analysis.
Amicus Therapeutics (FOLD)
Switching gears now to a biotech focused primarily on metabolic diseases, Amicus Therapeutics (NASDAQ:FOLD) has made a name for itself as a company that delivers high-quality medicines. On top of its drug commercialized for Fabry disease, it boasts an investigational enzyme replacement therapy, AT-GAA, in late stage development for the treatment of Pompe disease as well as a gene therapy pipeline and growth platform for lysosomal storage disorders.
It also doesn’t hurt that the company released preliminary financial results that featured better-than-expected revenue. According to FOLD, full year 2019 revenue for Galafold, part of the Fabry franchise, are expected to reach $181 million, surpassing the guidance of $170 million to $180 million and the $178 million consensus estimate. Despite the $5 million FX headwind, this strong result will likely come as a result of robust adoption and high compliance.
“Continued global expansion of Galafold was highlighted, including recent approvals in Brazil, Colombia and Taiwan, while 2020 guidance will be provided next week, which we expect to be in line with consensus. Overall, with Galafold execution ahead of expectations, continued pipeline progress, and a Pompe program that remains underappreciated, we reiterate an Outperform rating,” Baird analyst Michael Ulz wrote in a recent note to clients.
Alongside the bullish call, the analyst attached a $20 price target, implying that shares could be in for a whopping 92% increase over the next twelve months.
While only two other analysts have issued a recommendation recently, both were also in favor of FOLD, lending itself to a Strong Buy Street consensus. A 127% gain will be achieved should the average price target of $23.67 be met. See the FOLD stock analysis.
BioXcel Therapeutics (BTAI)
Truly embodying what it means to combine biology and technology, BioXcel Therapeutics (NASDAQ:BTAI) uses artificial intelligence to find new medicines for immuno-oncology and neuroscience applications. Already starting the year off strong with a 14% gain, more could be on the way according to the pros on Wall Street.
After a recent meeting with the company’s management, BMO Capital analyst Do Kim is even more confident in its ability to outperform in the long run. BTAI is planning on expanding its BXCL501 program across the agitation disorder spectrum, which includes the pre- to chronic agitation and severe, aggressive agitation, a strategic decision the analyst believes will ultimately pay off. Based on his estimates, Kim sees the BXCL501 opportunity as being underappreciated, with the favorable trial data reducing the risk of BioXcel’s ongoing development of expansion programs.
It’s no wonder, then, that Kim decided to stay on the bulls’ side. In addition to leaving the Outperform rating as is, he bumped up the price target from $21 to $26. This new target conveys his confidence in BTAI’s ability to climb 56% higher in the next twelve months.
Out of three total analysts tracking BTAI over the last three months, 100% are on board, indicating a unanimous Strong Buy consensus rating. To top it all off, the $26.67 average price target suggests 62% upside potential. See the BTAI stock analysis.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Maya Sasson did not hold a position in any of the aforementioned securities.