We recently published a list of 10 Best Multibagger Stocks To Buy Heading into 2025. In this article, we are going to take a look at where Larimar Therapeutics, Inc. (NASDAQ:LRMR) stands against other best multibagger stocks.

November has been an eventful month so far for the market as the Fed cut rates by a quarter percentage and president-elect, Donald Trump won the election for the second time. The market reacted positively to these events as the major indices touched all-time highs and even Bitcoin finally broke off its shell after many months, reaching an all-time high of $93,000.

More recently, Federal Reserve Chair Jerome Powell stated that solid economic growth, low unemployment, and inflation above 2% mean there’s no urgency to cut interest rates. Speaking in Dallas, Powell said inflation is on a path toward the Fed’s 2% target, allowing for cautious policy adjustments.

He highlighted the economy’s strong fundamentals but acknowledged persistent inflation pressures. While a rate cut is expected by the market in December, it anticipates fewer cuts next year due to steady inflation and policy uncertainties. According to the CME FedWatch, 62.4% of the interest rate traders expect a 25 bps rate cut in December. However, in January, 55.5% of the market anticipates the rates to remain the same after the December cut.

Powell emphasized that the Fed will monitor inflation closely, especially housing costs, as it aims to reach its target sustainably.

READ ALSO: 12 High Growth Large Cap Stocks to Buy Now and 10 Best Low Volatility Stocks to Invest in Now.

Election Boosts Market Optimism but Risks Remain

Stuart Kaiser, Citi’s head of equity trading strategy recently joined CNBC’s Closing Bell. In the post-election discussion, Kaiser expressed a generally optimistic outlook, with confidence that the markets have cleared the immediate uncertainties related to the election. Kaiser noted a temporary boost from this event but emphasized that moving forward, market focus will return to U.S. economic growth, the Fed’s actions, and corporate earnings.

While he believes valuations are currently more justifiable with expected growth from deregulation and new policy changes, he remains cautious about risks tied to bond market movements and rising yields. He suggested that rising yields linked to economic growth are manageable for equities, but warned against yields climbing due to fiscal or tariff issues, which could unsettle the market.

Regarding equity strategy, Kaiser advocated a cautious approach to small-cap investments, preferring high-quality, profitable small caps due to their domestic focus, which could shield them from trade policy risks impacting larger companies. Additionally, although Kaiser doesn’t handle non-traditional assets directly, he acknowledged that assets like Bitcoin might gain traction in a strong economic or supportive policy environment.

Our Methodology

For this article, we used the Finviz stock screener to identify over 350 stocks with share price gains of over 100% in the last 12 months, as of November 13. Next, we narrowed our list to 28 stocks with share price gains of 200% either in the last 12 or 24 months and Buy or better ratings from analysts. From that list, we removed the stocks that had negative share price returns compared to 24 months ago and finally narrowed the list to 10 stocks with an average analyst price target upside of over 100%. The 10 best multi-bagger stocks are listed in ascending order of their average price target upside.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Larimar Therapeutics, Inc. (NASDAQ:LRMR)

1-Year Share Price Performance: ~233%

2-Year Share Price Performance: ~159%

Average Price Target Upside: 182.59%

Larimar Therapeutics, Inc. (NASDAQ:LRMR) is a biotechnology company at the clinical stage, focusing on therapies for rare and complex diseases. Its main candidate, nomlabofusp, is in development to potentially treat Friedreich’s ataxia.

Friedreich’s ataxia is a rare genetic disorder that affects the nervous system and muscles, leading to progressive movement and coordination difficulties. The disorder primarily impacts the spinal cord and peripheral nerves, which help control muscle movement. Symptoms usually appear in childhood or adolescence and may include loss of coordination, muscle weakness, difficulty walking, speech problems, and heart disease. The company also aims to expand its intracellular delivery platform to create fusion proteins for other rare diseases that involve intracellular bioactive compound deficiencies.

Larimar (NASDAQ:LRMR) shared its third-quarter 2024 financial and operational updates, emphasizing the progress of nomlabofusp. The company has activated all trial sites for its open-label extension (OLE) study, where patients receive a daily 25 mg dose of nomlabofusp to assess safety, pharmacokinetics (PK), and frataxin levels. The company expects to present data in December 2024 and provide enrollment updates. Additionally, in November, it will present new findings at the ongoing International Congress for Ataxia Research (ICAR) based on its completed dose exploration studies.

Regulatory developments include receiving the U.K.’s ILAP designation from the MHRA, which could expedite nomlabofusp’s market access in the U.K. Larimar has also begun engagement with the FDA’s START pilot program. The company aims to refine its market strategy by consulting with stakeholders and is on track to submit a Biologics License Application (BLA) in the latter half of 2025 to pursue accelerated approval.

Future plans include a PK run-in study with adolescents by year-end and younger children next year, followed by a larger confirmatory study across the U.S., Europe, and additional locations in mid-2025. As of September 30, 2024, Larimar (NASDAQ:LRMR) held $203.7 million in cash, cash equivalents, and marketable securities, supporting operations into 2026.

On October 31, Citi initiated a “90-day positive catalyst watch” on Larimar (NASDAQ:LRMR), as reported by The Fly. The firm maintained a Buy rating with a $14 price target on the stock. It expects initial data from the open-label extension study of nomlabofusp to be released mid-December.

The data is anticipated to provide valuable information on long-term frataxin concentration kinetics and safety, extending beyond the 28-day dosing from the Phase 2 study. Citi sees potential gains for the stock if the results confirm a strong safety profile, sustained frataxin levels, and early indications of positive treatment outcomes.

Overall, LRMR ranks 3rd on our list of  best multibagger stocks to buy heading into 2025. While we acknowledge the potential of LRMR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LRMR 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.

Disclosure: None. This article is originally published at Insider Monkey.