Amid some rising questions for the economy, value-seeking investors may want to consider underappreciated biotech stocks. As a sector that, while not immune to broader pressures, generally manages to march to its own beat, the underlying innovation may offer an alternative upside pathway.

By now, you’ve likely heard about the impressive third-quarter U.S. GDP print, which came in hotter than expected. But looking ahead, circumstances don’t seem so rosy to justify belief in a repeat performance. For example, consumers don’t seem to want to acquire big-ticket items, as evidenced by the electric vehicle fallout.

Also, companies are responding to the high inflation and high interest rate environment through layoffs. We’re not talking about disposable jobs but occupations at some of the world’s biggest institutions. Therefore, it may be best to find sectors that have their own rhythm.

Of course, no sector enjoys perfect immunity. However, scientific research is an ongoing pursuit, irrespective of the economy. And with that, these undervalued biotech stocks could be worth a look.

Regeneron (REGN)

As one of the top biotech stocks, Regeneron (NASDAQ:REGN) has long carried relevance in the sector. However, it received a jolt of public awareness when it developed an antibody cocktail to address Covid-19. Its most famous patient at the time was of course former U.S. President Donald J. Trump. These days, REGN leads a more quiet life in the market.

That’s not a bad thing by the way. Since the beginning of the year, REGN gained over 15% of equity value. However, it still makes a case for one of the stable but undervalued biotech stocks to buy. Specifically, shares trade at a price/earnings-to-growth (PEG) ratio of 0.76X. The PEG factors in a company’s expected earnings growth, with ratios under 1 typically implying an undervalued status.

Notably, Regeneron also enjoys strong profit margins, particularly a net margin that clocks in at 30.47%. That’s above 94% of sector rivals. Analysts rate REGN a consensus strong buy with a $927.16 price target, making for a decent potential return.

BioNTech (BNTX)

Another blast from the Covid past, BioNTech (NASDAQ:BNTX) is a German enterprise that develops and manufacturers active immunotherapies for patient-specific approaches to the treatment of diseases. Outside of aficionados of biotech stocks, BioNTech represented an unknown to the American public before it partnered with Pfizer (NYSE:PFE) to develop a SARS-CoV-2 virus vaccine.

However, with fears of the pandemic having plunged, BNTX lost considerable momentum in the market. It’s been down sharply since the beginning of the year. Still, for those that see the glass half-empty, BNTX may represent one of the cheap biotech stocks to buy. Also, it’s been on the move in recent sessions thanks to the company’s third-quarter earnings report.

Though earnings per share and revenue declined on a year-over-year basis, BioNTech managed to beat analysts’ expectations. In addition, BNTX trades at only 2.86x free cash flow (FCF). In contrast, the sector median stands at 30.59x. Analysts peg shares a moderate buy with a $131.82 price target, projecting healthy upside.

Halozyme (HALO)

Headquartered in San Diego, California, Halozyme (NASDAQ:HALO) develops oncology therapies designed to target the tumor microenvironment. One of the most promising middle-capitalization biotech stocks, it enjoys a solid performance over the trailing five years. However, it’s been a choppy ride since early 2021. Subsequently, from the January opener to Nov. 1, HALO hemorrhaged about 39% of equity value.

Since Nov. 1, though, HALO has blossomed. Currently, Wall Street is responding very positively to Halozyme’s recent Q3 earnings report, which saw EPS land at 75 cents. In contrast, analysts anticipated per-share profitability to hit 71 cents. Not only that, in Q3 2022, reported EPS was only 44 cents. Naturally, investors appreciated the expansion of the bottom line.

It gets even better. According to investment data aggregator Gurufocus, HALO trades at only 9.45x forward earnings. In contrast, the sector median stat lands at 19.06X. Also, the market prices the firm at 18.25x FCF, ranked favorably lower than 71.15% of its peers. Subsequently, analysts rate HALO a moderate buy with a $52.56 price target.

Corcept Therapeutics (CORT)

Based in Menlo Park, California, Corcept Therapeutics (NASDAQ:CORT) is an advanced pharmaceutical firm. Specifically, it focuses on the discovery, development and commercialization of drugs for the treatment of severe metabolic, psychiatric and oncologic disorders. Since the start of the year, CORT is up a healthy clip. However, it’s been down heavily since late September.

To be fair, a sharp influx of red ink usually presents significant concerns. However, CORT could make a case for undervalued biotech stocks to gamble on. Early this month, the company posted EPS of 28 cents in Q3, beating out analysts’ consensus view of 22 cents. Also, revenue jumped 22% YOY to $123.6 million, rising above the estimate calling for $118 million.

In full disclosure, research and development and other expenses increased due to expenditures on clinical studies. Still, CORT should attract buyers with a price-to-FCF ratio of only 18.71x, landing below almost 61% of rivals. As well, analysts peg shares a strong buy with a $36.83 average price target.

Incyte (INCY)

A multinational pharmaceutical firm, Incyte (NASDAQ:INCY) develops and manufacturers prescription biopharmaceutical medications in multiple therapeutic areas including oncology, inflammation and autoimmunity. Despite its relevance, INCY has been struggling badly this year, losing a hefty amount since the January opener. It’s also in the red compared to the trailing five-year period.

Nevertheless, for speculators seeking cheap biotech stocks to buy, INCY could attract interest. For one thing, while the analysts’ consensus view of Incyte of moderate buy sits a bit in the middle land – six buys, seven holds – the average price target lands at $79.31. That’s quite a healthy leap from current levels. Also, the maximum price target of $98 comes from Goldman Sachs, implying substantial confidence.

Moving forward, the narrative appears intriguing for those willing to take the risk. Per Zacks Equity Research, Incyte posted EPS of $1.10 in Q3, beating the analysts’ target of $1.09. However, revenue of $919.03 million missed the target by 5.58%. Still, by topping the year-ago quarter’s tally of $823.3 million, INCY – which trades at 21.82x FCF – may have some legs.

Genmab (GMAB)

A Danish entry for undervalued biotech stocks, Genmab (NASDAQ:GMAB) operates through multiple international subsidiaries. According to its public profile, Genmab features eight approved antibodies used in eight market products. These solutions cover cancer indications and autoimmune diseases. While offering a compelling scientific profile, GMAB suffered heavily in the market this year.

Still, over the past 60 months, GMAB posted a decent performance, lending support that it could be one of the cheap biotech stocks to buy. Recently, the company disclosed its Q3 results, which saw revenue hit $4.74 billion, up from the year-ago quarter’s tally of $4.09 billion. Also, EPS clocked in at 46 cents, above the consensus target of 32 cents.

Notably, the market prices GMAB at a PEG ratio of 0.64x, lower than the sector median value of 1.59x. In addition to consistent profitability, the company enjoys robust stability in the balance sheet. Lastly, analysts peg GMAB a moderate buy with a $46 average price target, projecting substantial growth.

Kiniksa Pharmaceuticals (KNSA)

One of the bigger small-cap biotech stocks, Kiniksa Pharmaceuticals (NASDAQ:KNSA) focuses on finding and delivering novel treatments for patients with significant unmet needs. Per its website, Kiniksa features multiple therapeutics in its pipeline that address cardiovascular diseases and autoimmune conditions. While not printing a blistering performance (yet), KNSA is holding its own so far this year.

Still, Kiniksa swims in tricky waters. Late last month, the company released its Q3 earnings report, which saw a loss of 20 cents per share. In contrast, analysts anticipated a loss of 17 cents. The performance also happened to clash heavily with Q3 2022’s result, which saw EPS land at $3.23. At the time, analysts expected Kiniksa to deliver earnings of only 47 cents per share.

On the positive side, KNSA trades at an enterprise-value-to-revenue ratio of 3.8X. For context, the sector median stands at a loftier 7x. Also, analysts appreciate the opportunity, pegging it a moderate buy with a $26 price target. Thus, it could be one of the undervalued biotech stocks with serious upside potential.

On the date of publication, Josh Enomoto did not have (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.