We recently published a list of the 12 Best Up and Coming Stocks to Buy According to Wall Street Analysts. In this article, we are going to take a look at where Vaxcyte, Inc. (NASDAQ:PCVX) stands against other up and coming stocks to buy according to Wall Street Analysts.
Tom Lee, Fundstrat managing partner, joined CNBC’s ‘Closing Bell’ on March 22 to discuss the current market sentiment. When asked about the recent report on tariffs, which oscillates between an iron fist and an olive branch, Lee expressed optimism. He suggested that markets should interpret the situation positively because many clients view tariffs as punitive and potentially recession-inducing. However, a mutually agreed or reciprocal tariff deal could create a favorable scenario for businesses, potentially setting the stage for a significant recovery rally. Addressing the immediate challenge of volatility leading up to April 2, Lee acknowledged the dilemma investors face during this period of uncertainty. He noted that many are overwhelmed by market fluctuations and tempted to give up. Drawing a parallel to the Cuban Missile Crisis in 1962, which lasted 12 days, Lee pointed out that markets historically bottom before crises are resolved. For instance, during that crisis, the stock market reached its lowest point seven days in and recovered two-thirds of its losses before the resolution. He suggested this historical pattern could serve as a template for today’s market behavior.
When asked about the economy, Lee remarked on how quickly sentiment has deteriorated. He attributed part of this decline to divisive political leadership that affected consumer confidence and noted that CEO confidence has also dropped unexpectedly. CEOs have become hesitant to make decisions, which is contributing to what he described as a growth shock. However, he remained hopeful that this slowdown would be temporary if it does not persist for months. The conversation shifted to concerns about a potential recession, with Jeffrey Gundlach recently estimating a 50% to 60% chance of one occurring in the next few quarters. Lee countered this by stating that while a 10% drawdown in the S&P 500 already prices in a 40% chance of recession, markets do not fully align with Gundlach’s pessimistic view. He highlighted that economies like China, Europe, Canada, and Mexico have been outperforming the US since February 18. If punitive tariffs were truly driving global recessions, these economies would also be struggling. Instead, Lee described markets as more paralyzed than outright pessimistic.
Our Methodology
We used the Finviz stock screener to compile an initial list of the top stocks that went public in the last 5 years. We then selected the 12 stocks with high analysts’ upside potential as of March 21 that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
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 research scientist in a laboratory holding a vial of a biotechnology drug.
Vaxcyte, Inc. (NASDAQ:PCVX)
Average Upside Potential as of March 21: 105.48%
Number of Hedge Fund Holders: 50
Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical-stage biotechnology vaccine company. It develops conjugate and novel protein vaccines to prevent bacterial infectious diseases, with lead candidates like VAX-24 and VAX-31 targeting pneumococcal disease. It’s also developing vaccines for Group A Streptococcus, periodontitis, and dysentery/shigellosis.
The company is actively developing and commercializing its pneumococcal conjugate vaccines (PCVs), which combat bacterial diseases. This segment is driven by the global pneumococcal vaccine market, which is valued at ~$8 billion annually, with growth potential in the adult segment due to expanded vaccination guidelines. The company’s lead PCV candidate, VAX-31, has demonstrated robust immune responses and a safety profile in adults comparable to existing vaccines. The FDA granted Breakthrough Therapy Designation for VAX-31, which expedites its regulatory pathway.
Vaxcyte, Inc. (NASDAQ:PCVX) is advancing VAX-31 into a Phase 3 program for adults, with initiation expected by mid-2025 and top-line data anticipated in 2026. The company is also progressing its VAX-24 and VAX-31 programs in infants, with data from the VAX-24 Phase 2 study expected by the end of FQ1 2025. To support the anticipated commercial demand, the company is investing in manufacturing scale-up, which includes the construction of a manufacturing suite at Lonza. It’s expected to be completed by early next year.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Vaxcyte, Inc. (NASDAQ:PCVX) in its Q3 2024 investor letter:
“Vaxcyte, Inc. (NASDAQ:PCVX) (developer of vaccines) and Insmed Incorporated (developer of treatments for various pulmonary diseases). Vaxcyte’s lead pneumococcal vaccine candidate recently reported positive clinical data across a wider range of pneumonia types than current treatments. That created significant potential for Vaxcyte to take share within a multi-billion-dollar market, and we began to build a position.”
Overall, PCVX ranks 3rd on our list of the best up and coming stocks to buy according to Wall Street Analysts. While we acknowledge the growth potential of PCVX, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PCVX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
