We recently compiled a list of the 12 Most Promising Biotech Stocks According to Wall Street Analysts. In this article, we are going to look at where Insmed Incorporated (NASDAQ:INSM) stands against other biotech stocks.
Biotech Sector Set for Growth Amid Innovation and Investor Interest
The biotechnology sector is gaining new momentum with better market conditions, cutting-edge innovations, and growing investor attention. The industry has recovered from a challenging 2024 and is poised for significant expansion led by advances in personalized medicine, AI-driven drug discovery, and growing demand for biologics. MarketsandMarkets predicted that the global biotech market would expand by a strong 13%, from $483.0 billion in 2024 to $546.0 billion in 2025. This expansion demonstrates the sector’s tenacity and promise for growth.
The anticipated shift in the Federal Reserve’s interest rate policies is a key driver of this upturn. Biotech is sensitive to changing rate patterns since it requires a large amount of money for costly R&D and clinical testing. Lower rates make more funding available, which helps biotech companies expand, draw in venture capital, and expedite drug development, according to Genetic Engineering and Biotechnology News. A rate drop, according to analysts, may release billions of dollars in investment funds that have been put aside for fledgling biotech firms looking for steady funding.
Investor interest in biotech equities is growing. Biotech is still a high-growth industry with many chances for risk-takers, despite brief ups and downs. The comeback of biotech has been noted by leading investment banks. Citing solid fundamentals, improved clinical outcomes, and a supportive regulatory environment, Goldman Sachs referred to it as an “undervalued opportunity.” According to the firm, biotech equities have tremendous upside potential and an “option-like structure,” particularly when interest rates decline. Analysts at JPMorgan anticipate a recovery in biotech funding at the same time, pointing to indications of stability in manufacturing and research sectors that were negatively impacted by earlier funding shortages. Industry analysts predict that declining interest rates and advantageous investment circumstances may reopen the IPO window for businesses looking for institutional support, even though biotech IPOs have been quiet since 2021.
As gene editing, AI-powered drug discovery, and precision medicine transform how we treat uncommon genetic illnesses, autoimmune diseases, and cancer, scientific advances are also propelling the expansion of biotech. Biotech firms are meeting medical demands in ways that were unthinkable a decade ago because of developments in CRISPR gene editing and cell treatments. Given this, we will take a look at some of the best promising stocks from the biotech sector.
Our Methodology
For this article, we shortlisted stocks that met the following criteria: a market capitalization of over $2 billion, coverage by at least 15 analysts, and a price target upside of more than 20%. We then ranked the selected stocks based on their price target upside, as determined by Wall Street analysts, as of March 21, 2025.
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).
A biopharmaceutical research team taking notes in front of a laboratory’s microscope.
Insmed Incorporated (NASDAQ:INSM)
Analyst Upside: 22.66%
Insmed Incorporated (NASDAQ:INSM) is a global biopharmaceutical company focused on developing treatments for rare diseases, particularly those affecting the lungs. Patients with few other treatment options are treated for Mycobacterium avium complex (MAC) lung illness with its most effective drug, ARIKAYCE (amikacin liposome inhalation suspension). The business is also creating new treatments, such as TPIP, which treats pulmonary hypertension associated with lung disorders, and Brensocatib, a medication for bronchiectasis.
Insmed Incorporated (NASDAQ:INSM) reported record revenue growth of 19% to $363.7 million for the year in its Q4 2024 financial report. The corporation performed well in all regions: revenue increased by 14% in the US, 33% in Japan, and 39% in Europe and the rest of the world. Its growth is still being driven by its ARIKAYCE, with sales estimates for 2025 ranging from $405 million to $425 million, solidifying its position among the Most Promising Stocks.
Despite reporting a $191 million cash burn in Q4 as a result of investments in the launch of Brensocatib, Insmed Incorporated (NASDAQ:INSM) ended 2024 with a healthy cash position of over $1.4 billion. Despite these charges, the business spent $599 million on research and development (R&D) and $462 million on selling general, and administrative (SG&A) costs. Supporting Brensocatib’s Phase III outcomes also increases the likelihood that the FDA will approve the medication and that it will be successful commercially in the future.
Fourteen Wall Street analysts set a 12-month price target for Insmed Incorporated (NASDAQ:INSM), averaging $98 (high: $110, low: $90), a 22.62% increase from its last price of $79.92.
Overall, INSM ranks 12th among the 12 most promising biotech stocks according to wall street analysts. While we acknowledge the potential of biotech companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure. None: This article is originally published on Insider Monkey.
