In this article, we will discuss the 12 Best Multibagger Stocks to Buy Right Now.
The US equities continued their upward movement in 2024 and fueled the S&P 500 to record highs. Much of this optimism in the broader market was backed by the strong US economy and the Federal Reserve’s stance to cut interest rates. As per PBS News, 2024 saw several familiar winners, like big technology stocks. These stocks got even bigger due to continuous increases in their stock prices. Apart from certain tech giants, strong momentum was also seen in Bitcoin, gold, and other investments.
Performance of US Equity Markets in 2024- A Recap
Ameriprise Financial reported that 2024 had a strong start, with the S&P 500 Index concluding the Q1 on a high note due to a healthy US economic backdrop, moderating inflation, improvement in profit conditions, and anticipations of rate cuts from the US Fed.
The strong growth momentum continued in Q2 as the S&P 500 Index saw its strongest three-quarter run since mid-2021. Ameriprise Financial highlighted that an AI boom again drove healthy gains throughout IT and communication services. However, increased rates and a pause by the US Fed capped broader market gains. In September, the US Fed reduced its policy rate for the first time since 2020, concluding its aggressive rate-hiking cycle to control inflation. Therefore, it began a new monetary policy stance that supported economic growth and the labor market. Additionally, since the election, investors’ confidence has been further boosted towards risky assets, including equities.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
What to Expect in 2025?
For the S&P 500, J.P. Morgan Research projects a price target of 6,500 next year, with EPS of $270. The US is expected to remain a global growth engine with the expansionary business cycle, healthy labor market, broadening of AI-associated capital spending, and the prospect of strong capital markets and dealmaking activity.
Furthermore, BlackRock sees several factors expected to support stocks in 2025. The decisive election result removed key uncertainty hanging over the broader US market. The rally that was seen after the results might continue into the start of 2025 primarily because of prospects of tax cuts and deregulation throughout key industries. While the impact of some policies remains uncertain, history has a long-term record of positive returns in 1st year of a Presidential term. The firm also believes that earnings and valuations hint at healthy potential for a continued broadening of the market. Its analysis of the S&P 500 data reflects that earnings for Mag 7 stocks outperformed the broader market by 37% in 2023. This earnings gap was narrowed across 2024. Now, it expects it to decline to 7.5% in 2025.
With this in mind, let us now have a look at the 12 Best Multibagger Stocks to Buy Right Now
A stock market chart. Photo by Arturo A on Pexels
Our Methodology
To list the 12 Best Multibagger Stocks to Buy Right Now, we used a screener to shortlist the stocks that have gained over 100% over the past year and have healthy average upside potential. Finally, the stocks are arranged in ascending order of their average upside potential, as of 30th December 2024. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Multibagger Stocks to Buy Right Now
12) Insmed Incorporated (NASDAQ:INSM)
Number of Hedge Fund Holders: 67
One-year Return: ~130%
Average Upside Potential: ~32.4%
Market Cap as of 30th December: $12.3 billion
Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical company, which is engaged in developing and commercializing therapies for patients with serious and rare diseases.
Expected for launch in mid-2025, Brensocatib represents a major near-term catalyst for Insmed Incorporated (NASDAQ:INSM). The successful commercialization of this drug can significantly impact the company’s financial outlook. Brensocatib targets the underlying cause of inflammation in NCFBE (Non-Cystic Fibrosis Bronchiectasis) by inhibiting neutrophil serine proteases (NSPs). Current treatments only manage symptoms, and there are no approved therapies to address the underlying inflammation.
If Brensocatib achieves rapid market adoption and meets or surpasses sales projections, it can fuel substantial top-line growth for Insmed Incorporated (NASDAQ:INSM). This will offer immediate financial benefits and will also validate the company’s R&D capabilities. Insmed Incorporated (NASDAQ:INSM) believes Brensocatib and non-cystic fibrosis bronchiectasis alone to be a $5 billion-plus peak sales operating opportunity. The success in the bronchiectasis market can offer the company a platform to expand into associated respiratory conditions or rare diseases.
As per Wall Street, the expertise and infrastructure developed for bronchiectasis can be used to ramp up the development and commercialization of treatments for other indications, multiplying Insmed Incorporated (NASDAQ:INSM)’s addressable market.
TimesSquare Capital Management, an equity investment management company, sees material upside to Insmed Incorporated (NASDAQ:INSM)’s stock on the back of optimism around Brensocatib. Here’s what the firm said in its Q3 2024 letter:
“Vaxcyte, Inc. (developer of vaccines) and Insmed Incorporated (NASDAQ:INSM) (developer of treatments for various pulmonary diseases). Insmed has one commercially approved treatment for lung infections that is under review for expanded use. Recently another treatment reported positive clinical data that paves the way for a commercial launch in 2025. The latter, Brensocatib, will be the first approved to treat directly chronic bronchial issues that currently only have symptom mitigation methods.”
11) CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Holders: 32
One-year Return: ~172%
Average Upside Potential: ~34.5%
Market Cap as of 30th December: $12.8 billion
CAVA Group, Inc. (NYSE:CAVA) operates a chain of fast-casual restaurants specializing in Mediterranean cuisine.
Wall Street analysts are drawing parallels between CAVA Group, Inc. (NYSE:CAVA) and Chipotle Mexican Grill, reflecting that the former can potentially replicate Chipotle’s remarkable growth trajectory. Both companies operate in the fast-casual segment, providing customizable and health-focused menu options.
CAVA Group, Inc. (NYSE:CAVA)’s Mediterranean-inspired cuisine focuses on growing consumer demand for diverse, flavourful, and nutritious food options. Therefore, this positioning is expected to allow the company to capture a significant market share as it expands nationally, just like Chipotle revolutionized the broader Mexican fast-casual category.
As per analysts, if CAVA Group, Inc. (NYSE:CAVA) maintains its strong unit economics and continues to resonate with its customers throughout different regions, it can become a leading player in the fast-casual restaurant industry. CAVA Group, Inc. (NYSE:CAVA)’s focus on technology integration, like its mobile app and digital ordering platforms, are some of the successful strategies likely to help the company.
Simplifying kitchen processes and leveraging technology for order management can help reduce labor costs and minimize waste. Furthermore, continuous refinement of the menu to focus on high-margin, high-demand items and reducing menu complexity to reduce ingredient costs can help in maintaining healthy unit economics.
10) Sweetgreen, Inc. (NYSE:SG)
Number of Hedge Fund Holders: 25
One-year Return: ~186%
Average Upside Potential: ~37.2%
Market Cap as of 30th December: $3.70 billion
Sweetgreen, Inc. (NYSE:SG) operates fast-food restaurants in the United States that serve healthy foods on a large scale.
Wall Street believes that Sweetgreen, Inc. (NYSE:SG)’s innovation is its proprietary “Infinite Kitchen” technology. This robotic assembly line system is focused on improving operational efficiency and customer experience. Sweetgreen, Inc. (NYSE:SG) successfully retrofitted its first location in New York City and aims to open more “Infinite Kitchen” locations within the year. “Infinite Kitchen” is an innovative concept that uses robotic automation technology to streamline and optimize food preparation processes.
Analysts opine that this technology should drive significant improvements in restaurant-level margins. Moreover, the “Infinite Kitchen” can potentially lower prices, which can expand the company’s market reach. Apart from reduced labor costs, this technology enables faster service times and increased throughput. Collectively, these can contribute to improved restaurant-level margins.
The technology’s ability to optimize ingredient usage and reduce food waste can result in cost savings and improved sustainability practices. As a result of increased efficiency and potential for lower prices, Sweetgreen, Inc. (NYSE:SG)’s offerings will be accessible to a broader customer base. This will result in an expansion of its total addressable market. As a result, this can accelerate Sweetgreen, Inc. (NYSE:SG)’s unit growth and market penetration, fueling long-term revenue growth and profitability.
Meridian Funds, managed by ArrowMark Partners, sees material upside to the company’s stock on the back of Sweetgreen, Inc. (NYSE:SG)’s investment in automation technology. Here’s what the firm said in its Q1 2024 letter:
“Sweetgreen, Inc. (NYSE:SG) operates restaurants serving fresh and healthy foods in the United States. The salad-focused restaurant concept has invested heavily to develop a captive network of growers that help ensure the freshness of its produce, a distinct competitive advantage. Additionally, management’s investment in automation technology, known as the “Infinite Kitchen,” has shown strong promise of significant labor cost savings, a reduction of order fulfillment errors, and increased restaurant throughput. While Infinite Kitchen has only been tested in a handful of stores to date, initial data supports the potential for automation technology to significantly improve both margins and average unit volumes. The stock rose in the quarter on accelerating same-store sales growth and better than expected guidance from management. In addition, investors took notice that material margin improvements could quickly reduce Sweetgreen’s cash burn, a prior source of concern. Sweetgreen was a new position for the Fund in the quarter.”
9) FTAI Aviation Ltd. (NASDAQ:FTAI)
Number of Hedge Fund Holders: 41
One-year Return: ~179%
Average Upside Potential: ~38.3%
Market Cap as of 30th December: $13.7 billion
FTAI Aviation Ltd. (NASDAQ:FTAI) primarily focuses on the acquisition and leasing of aircraft, aircraft engines, and related equipment.
FTAI Aviation Ltd. (NASDAQ:FTAI)’s growth trajectory over the past year stemmed from supply chain disruptions and engine durability issues from major manufacturers, leading to shortages in the aviation sector. FTAI Aviation Ltd. (NASDAQ:FTAI)’s integrated approach to jet-engine leasing and repair has placed it well in addressing these shortages, enhancing its market value. Furthermore, FTAI Aviation Ltd. (NASDAQ:FTAI) entered into a 5-year maintenance service agreement with International Aero Engines AG (IAE) for V2500 engines, covering more than 100 full-performance restoration shop visits.
Why has this agreement fueled investors’ optimism? Well, this agreement solidifies the company’s position in the V2500 engine market and enhances future revenue visibility. With more than 100 full-performance restoration shop visits covered under this agreement, FTAI Aviation Ltd. (NASDAQ:FTAI) can assume consistent revenue and improved capacity utilization in its engine maintenance segment.
As the V2500 engine is being widely used in narrowbody aircraft, this partnership is expected to lead to additional contracts and market share gains in the future.
ClearBridge Investments sees a material upside to the stock on the back of meaningful revenue and earnings growth potential. Here’s what the firm said in its Q3 2024 letter:
“We are encouraged by the high proportion of positive returns on new ideas added over the last five quarters of elevated new idea generation, with solid contributions to overall performance despite their representing a modest portion of the Strategy’s assets.
We continued to deliver strong new idea generation, adding four new investments in the quarter: OneStream (through participating in its IPO), Abercombie & Fitch, Wintrust Financial, and FTAI Aviation Ltd. (NASDAQ:FTAI).
FTAI Aviation is an aerospace company that offers both engine and aircraft leasing services, as well as an aftermarket for engine products and services. With a focus on several widely used and aging engine platforms, the company’s differentiated modular approach to aftermarket products, along with the unique assets from its leasing business, offers meaningful revenue and earnings growth potential.”
8) VEON Ltd. (NASDAQ:VEON)
Number of Hedge Fund Holders: 7
One-year Return: ~106%
Average Upside Potential: ~40.5%
Market Cap as of 30th December: $2.97 billion
VEON Ltd. (NASDAQ:VEON) is a digital operator, that offers connectivity and internet services to corporates and individuals in Pakistan, and other countries. The company’s digital services focus on developing and delivering digital products, including financial services, content streaming, and e-commerce platforms.
VEON Ltd. (NASDAQ:VEON)’s growth trajectory is expected to be aided by its focus on digital services expansion. Direct digital revenues are revenues garnered through digital financial services, entertainment services, health care services, advertising, super apps, and enterprise services. These have been fueling additional revenue streams like advertising revenues, in-app purchases, interest income, and also additional subscriber revenues.
While these revenues are not included in VEON Ltd. (NASDAQ:VEON)’s telecom business, they made up ~11% of the total revenues in the first nine months of 2024. Diversification into multiple digital verticals enables the company to serve unmet market demand and expand its customer base, reducing dependency on a single revenue stream. VEON Ltd. (NASDAQ:VEON)’s investments in enterprise digital services including AdTech, cloud services, and software development have been paying off, positioning the company to seize new market opportunities.
Moving forward, VEON Ltd. (NASDAQ:VEON) is committed to enhancing its digital offerings and expanding its presence in key verticals, fueling growth and delivering value to its shareholders. Analysts at Benchmark assumed coverage on the shares of VEON Ltd. (NASDAQ:VEON) on 12th November. They gave a “Buy” rating and a $48.00 target price.
7) ADMA Biologics, Inc. (NASDAQ:ADMA)
Number of Hedge Fund Holders: 25
One-year Return: ~284%
Average Upside Potential: ~42%
Market Cap as of 30th December: $4.13 billion
ADMA Biologics, Inc. (NASDAQ:ADMA) is a biopharmaceutical company, that is engaged in developing, manufacturing, and marketing specialty plasma-derived biologics for the treatment of immune deficiencies and infectious diseases.
Industry experts believe that a strong sales outlook for Asceniv should drive growth for ADMA Biologics, Inc. (NASDAQ:ADMA) in the near to medium term. Asceniv is a proprietary, FDA-approved immune globulin intravenous (IGIV) therapy. It mainly treats patients with primary humoral immunodeficiency (PI), a group of disorders characterized by impaired antibody production.
Analysts believe that the ongoing post-marketing study for Asceniv is expected to provide a label expansion opportunity and include pediatric-aged PI patients. Notably, the potential label expansion of Asceniv is expected to boost revenue growth. ADMA Biologics, Inc. (NASDAQ:ADMA) remains focused on increasing Asceniv’s supply. If successful, Asceniv will be responsible for advancing its margin expansion and earnings growth. Asceniv complements Bivigam®, ADMA Biologics, Inc. (NASDAQ:ADMA)’s other IGIV product, allowing ADMA Biologics, Inc. (NASDAQ:ADMA) to serve a broader spectrum of patients having varying immune needs.
Asceniv is enriched with targeted antibodies, primarily against respiratory syncytial virus (RSV), placing it apart from standard IGIV therapies. Because of its specialized manufacturing process and targeted antibody profile, Asceniv commands a higher price point in comparison to traditional IGIV therapies, fueling per-unit revenue.
6) Summit Therapeutics Inc. (NASDAQ:SMMT)
Number of Hedge Fund Holders: 21
One-year Return: ~577%
Average Upside Potential: ~76%
Market Cap as of 30th December: $13.2 billion
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical company, that focuses on the discovery, development, and commercialization of patient, physician, caregiver, and societal-friendly medicinal therapies.
Summit Therapeutics Inc. (NASDAQ:SMMT)’s stock has increased ~577% over the past year, courtesy of the promising pipeline candidate, Ivonescimab, a potential cancer treatment. Ivonescimab is a novel, potential first-in-class investigational bispecific antibody that combines the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule.
Summit Therapeutics Inc. (NASDAQ:SMMT) continues to run a pair of phase 3 clinical trials in the US to support Ivonescimab’s approval in the country. The company is targeting non-small cell lung cancer (NSCLC). Ivonescimab received a fast-track designation from the US FDA for the treatment of metastatic non-squamous NSCLC. The fast-track program focuses on speeding up the development of promising medicines that fill a high unmet need. The company is expected to release top-line data from its phase 3 study in metastatic NSCLC next year.
Ivonescimab exhibited promising results in clinical trials, mainly in treating NSCLC. Notably, the Phase III HARMONi-2 trial showed a 49% reduction in disease progression risk compared to existing treatments. Such positive outcomes tend to increase the likelihood of regulatory approvals, potentially leading to market entry and subsequent revenue generation.
Furthermore, Summit Therapeutics Inc. (NASDAQ:SMMT) strategically expanded its licensing agreements to include regions like Latin America, the Middle East, and Africa. This expansion further broadens the potential market for Ivonescimab, allowing access to a larger patient population and increasing revenue opportunities.
5) MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
One-year Return: ~342%
Average Upside Potential: ~81.5%
Market Cap as of 30th December: $64.1 billion
MicroStrategy Incorporated (NASDAQ:MSTR) offers AI-powered enterprise analytics software and services.
MicroStrategy Incorporated (NASDAQ:MSTR)’s strategic pivot towards Bitcoin acquisition placed it well in the public markets, providing investors indirect exposure to the world’s largest cryptocurrency. At the core of the company’s current strategy is its aggressive Bitcoin acquisition plan. It has been utilizing a combination of cash from operations, debt issuance, and equity raises to finance its Bitcoin purchases.
MicroStrategy Incorporated (NASDAQ:MSTR)’s Bitcoin strategy provides investors with significant potential upside if Bitcoin prices appreciate. With the company accumulating more Bitcoin, any appreciation in Bitcoin’s value is expected to be magnified in the company’s stock price. The strategy offers a way for investors to provide exposure to Bitcoin via publicly-traded company, which can be more accessible or compliant with certain investment mandates than direct cryptocurrency investments.
If Bitcoin gets wider adoption as a store of value or hedge against inflation, MicroStrategy Incorporated (NASDAQ:MSTR)’s early position can result in substantial returns. In October, the company unveiled its plans to garner $42 billion in fresh capital for Bitcoin purchases over the upcoming 3 years. It holds 252,220 bitcoins as of September 30, 2024. The new capital-raising plan, called the “21/21 Plan,” focuses on securing $21 billion via equity offerings and another $21 billion through fixed-income securities over 2025 and 2027.
While there is optimism around the company’s stock, Artisan Partners, an investment management company, has avoided this company because the firm believes there is a lack of conviction in its franchise characteristics. Here’s what the firm said in its Q2 2024 letter:
“Regarding MicroStrategy Incorporated (NASDAQ:MSTR), our decision to avoid this company comes down to a lack of conviction in its franchise characteristics. The stock has worked this year due to a rebound in the price of bitcoin. Since 2020, MicroStrategy has been focused on converting its cash and cash equivalent holdings, as well as issuing debt, to fund the purchase of bitcoin, which now makes up most of the company’s value.”
4) AST SpaceMobile, Inc. (NASDAQ:ASTS)
Number of Hedge Fund Holders: 18
One-year Return: ~349%
Average Upside Potential: ~85%
Market Cap as of 30th December: $6.38 billion
AST SpaceMobile, Inc. (NASDAQ:ASTS) is engaged in developing and providing access to a space-based cellular broadband network for smartphones in the US.
AST SpaceMobile, Inc. (NASDAQ:ASTS)’s technology addresses a significant pain point, which is the lack of reliable mobile connectivity in remote and underserved areas. By offering direct-to-phone connectivity from satellites, it eliminates the need for ground-based infrastructure. The company successfully launched its first five commercial satellites, known as BlueBirds, reflecting a pivotal advancement toward establishing its space-based cellular network. Such satellites are among the largest communications arrays deployed in low-Earth orbit, underscoring AST SpaceMobile, Inc. (NASDAQ:ASTS)’s innovative capabilities.
With these satellites operational, the company can start garnering revenue via existing agreements with global telecom operators such as Vodafone, AT&T, and Rakuten. Revenue is expected to come from usage fees, data sharing, or subscription models. Furthermore, the BlueBird satellites have been designed to offer connectivity in remote and underserved regions, where traditional infrastructure is costly or impractical. These areas represent a vast, untapped market for AST SpaceMobile, Inc. (NASDAQ:ASTS)’s services.
As per Wall Street, the successful deployment of the BlueBird satellites is a game-changer for AST SpaceMobile, Inc. (NASDAQ:ASTS). These satellites should help the company unlock significant market opportunities, diversify its revenue streams, and establish itself as a leader in the ever-growing field of space-based mobile connectivity.
3) Avidity Biosciences, Inc. (NASDAQ:RNA)
Number of Hedge Fund Holders: 38
One-year Return: ~218%
Average Upside Potential: ~122%
Market Cap as of 30th December: $3.69 billion
Avidity Biosciences, Inc. (NASDAQ:RNA) is a biopharmaceutical company, which is engaged in the delivery of RNA therapeutics.
The strong performance of Avidity Biosciences, Inc. (NASDAQ:RNA)’s stock is being fueled by encouraging clinical development of its 3 rare neuromuscular programs — del-desiran for myotonic dystrophy type 1 (DM1), del-zota for Duchenne muscular dystrophy (DMD), and del-brax for facioscapulohumeral muscular dystrophy (FSHD). The FDA removed a partial clinical hold on del-desiran placed in 2022 after the news that a patient witnessed a serious adverse event in the phase I/II study. Notably, removing the clinical hold offers some sort of reassurance for the drug’s safety profile.
Wall Street experts believe that Avidity Biosciences, Inc. (NASDAQ:RNA)’s stock is well-placed to continue its growth trajectory given that it is expanding the current RNA-based pipeline of rare muscle disorders to explore precision cardiology. Precision cardiology represents the application of RNA-based therapeutics to target and treat specific genetic and molecular drivers of cardiovascular diseases.
Avidity Biosciences, Inc. (NASDAQ:RNA) announced it plans to advance 2 new wholly-owned pipeline drugs, AOC 1086 and AOC 1072, focusing on 2 rare genetic cardiomyopathies, PLN cardiomyopathy and PRKAG2 syndrome, respectively. AOC 1086 and AOC 1072 are expected to fuel significant revenue growth for Avidity Biosciences, Inc. (NASDAQ:RNA) as they demonstrate innovative, first-in-class RNA-based therapies targeted at treating genetically driven diseases with high unmet needs.
2) Zeta Global Holdings Corp. (NYSE:ZETA)
Number of Hedge Fund Holders: 31
One-year Return: ~115%
Average Upside Potential: ~132%
Market Cap as of 30th December: $4.30 billion
Zeta Global Holdings Corp. (NYSE:ZETA) operates an omnichannel data-driven cloud platform that offers enterprises consumer intelligence and marketing automation software in the US and internationally.
Wall Street analysts opine that Zeta Global Holdings Corp. (NYSE:ZETA)’s AI-powered marketing solutions have gained traction across all of its product lines. The company’s emphasis on AI-driven decision-making remains in line with industry trends favoring data-driven marketing strategies. As Zeta Global Holdings Corp. (NYSE:ZETA) continues to innovate and expand AI offerings, it can see further improvements in customer adoption, revenue growth, and operational efficiency. The scalability of AI-powered solutions should also fuel margin expansion.
Zeta Global Holdings Corp. (NYSE:ZETA) uses its proprietary data assets, AI algorithms, and machine learning capabilities in a bid to support brands deliver personalized marketing campaigns throughout various channels. The AI solutions predict customer behavior and preferences, allowing brands to target high-value prospects and retain existing customers with relevant offers. Therefore, by focusing on increasing customer lifetime value, Zeta Global Holdings Corp. (NYSE:ZETA)’s tools can help businesses generate more revenue from existing customer bases.
Zeta Global Holdings Corp. (NYSE:ZETA)’s platform dynamically adjusts campaigns based on real-time customer data, maintaining relevance and maximizing engagement.
Carillon Tower Advisers, an investment management company, sees material upside to Zeta Global Holdings Corp. (NYSE:ZETA)’s stock on the back of its artificial intelligence-based modules. Here’s what the firm said in its Q3 2024 letter:
“Zeta Global Holdings Corp. (NYSE:ZETA) is a marketing automation software vendor focused on customer data. The company has seen a healthy growth rate while posting solid margins and cash flow. This past quarter, investors appreciated acceleration in growth driven by Zeta’s artificial intelligence-based modules leading to increased spending on the company’s platform. Furthermore, Zeta’s exposure to political ad spending during a major election is raising expectations regarding growth in the second half of the year.”
1) Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number of Hedge Fund Holders: 41
One-year Return: ~117%
Average Upside Potential: ~176%
Market Cap as of 30th December: $4.44 billion
Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company, which focuses on the development of novel therapies for metabolic and endocrine disorders.
Wall Street remains optimistic about Viking Therapeutics, Inc. (NASDAQ:VKTX)’s lead program, VK2735, and its long-term growth potential. VK2735 is a novel dual-agonist designed to target the glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP) receptors. This combination enhances metabolic benefits for conditions such as obesity and type 2 diabetes. Viking Therapeutics, Inc. (NASDAQ:VKTX) made headway in its clinical trials for VK2735.
Recent developments have demonstrated VK2735 leading to significant weight loss results, bolstering the confidence of the investors. As per Maximize Market Research, the obesity treatment market size is expected to reach ~US$32.50 billion by 2029. Dual-agonists, like VK2735, reflect promise in delivering greater weight loss and glycemic control compared to GLP-1 monotherapies, placing Viking Therapeutics, Inc. (NASDAQ:VKTX) for long-term growth.
Viking Therapeutics, Inc. (NASDAQ:VKTX)’s clinical trials of VK2735 (both injectable and oral formulations) continue to progress well, with results so far indicating strong efficacy and tolerability. A successful transition to late-stage trials and eventual FDA approval should unlock additional opportunities for partnerships, licensing, or global commercialization.
Fred Alger Management, an investment management company, sees material upside to Viking Therapeutics, Inc. (NASDAQ:VKTX)’s stock on the back of the company’s GLP-1 drug, which it believes has the potential to be a best-in-class obesity drug considering its favorable efficacy and safety profile. Here’s what the firm said in its Q2 2024 letter:
“Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company focused on developing novel therapies for patients suffering from metabolic and endocrine disorders. Their lead drug VK2809, a beta-selective thyroid hormone receptor agonist, is in development for nonalcoholic steatohepatitis and nonalcoholic fatty liver disease. Their VK2735 drug is a GLP-1 dual agonist being developed for patients with obesity. During the quarter, the company’s shares were negatively impacted by several factors: 1) a challenging environment for biotechnology stocks, exacerbated by Fed policy decisions to maintain elevated interest rates, 2) increased competition in the obesity treatment landscape, 3) manufacturability and scalability concerns regarding Viking’s obesity drug and 4) the absence of strategic partnerships from large pharmaceutical companies. Despite the challenging quarter, we continue to believe that the company’s GLP-1 drug has the potential to be a best-in-class obesity drug given its favorable efficacy and safety profile. Further, with approximately one-third of U.S. adults suffering from obesity, we believe the company’s GLP[1]1 drug has the potential to address a large market once approved.”
While we acknowledge the potential of VKTX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than VKTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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