We recently published an article titled Jim Cramer’s Lightning Rounds: 9 Stocks in Focus. In this article, we are going to take a look at where Viking Therapeutics, Inc. (NASDAQ:VKTX) stands against the other stocks.
Jim Cramer, the host of Mad Money, recently expressed his concerns about the uncertain economic outlook for 2025, particularly in relation to corporate earnings and the stock market’s expectations for the upcoming year. He highlighted the important question at the heart of the market’s direction: Will corporate earnings grow as Wall Street is predicting?
According to Cramer, analysts are projecting a 12.2% growth in earnings for the S&P 500 this year, followed by 11.9% growth in 2026 though that is still a long way off. Cramer emphasized that these growth estimates, if realized, would be impressive and one of the main reasons why investors are willing to pay nearly 22 times this year’s earnings for the S&P 500. He added:
“Now, that’s a big premium versus its average forward multiple of 17.7 times earnings over the past decade. Buyers are comfortable paying up because they believe in across-the-board corporate earnings growth of about 12%.”
READ ALSO Jim Cramer Shed Light on These 9 Stocks and 9 Stocks Jim Cramer Talked About
Cramer went on to question if the market could even handle a higher growth rate of 24%, which some investors might find acceptable, but he also acknowledged the uncertainty about whether that is achievable. Cramer hopes that earnings growth can be driven by factors such as a strong consumer base, increased capital spending, deregulation, and a rebound in international markets, particularly China, following the pandemic. He added:
“Perhaps starting in 2026, additional tax cuts could provide another easy tailwind for corporate growth but there are also things that could trip us on that path to 12% earnings growth… like tariffs, higher interest rates, or worse, an erosion of consumer spending.”
As earnings season unfolds, Cramer believes that we’ll get a clearer picture of what to expect for 2025. Over the next few weeks, companies will report their fourth-quarter results and offer initial guidance for the full year.
He explained that if any of them issued disappointing forecasts, it could lead to a downward revision of earnings estimates, which would be a significant negative development for the market. He also added that such an outcome could result in investors paying too high a price for stocks relative to their earnings potential, which would be bad news for the averages.
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on January 10 and 15. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
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Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number of Hedge Fund Holders: 41
When a caller asked Cramer about Viking Therapeutics, Inc. (NASDAQ:VKTX), he suggested going for Viking Holdings instead as it might offer much less heartache.
“I want you to sell Viking Therapeutics and roll it into Viking Holdings, which is a fantastic cruise line, does not save lives, does not lower your blood pressure… but darn, you’ll have a good time.”
Viking Therapeutics, Inc. (NASDAQ:VKTX) focuses on developing novel therapies for metabolic and endocrine disorders, with several drug candidates in clinical trials for conditions such as non-alcoholic steatohepatitis, type 2 diabetes, and hip fracture recovery. Cramer has previously compared the company to its competitors in February 2024 as he said:
“If you should be king, you have to kill the king, but they’re not. Viking Therapeutics has a phase two trial that went well, that is able to get you to lose weight faster than Eli Lilly’s GLP-1… Now, here’s the problem… When you have these things, the FDA wants to favor the incumbent because it’s already been approved.
Secondly, Eli Lilly has a similar formulation, but third, what seems to be left out constantly is it’s really hard to build all the plants you need to get this. You’ve got David Ricks who’s very good, knows how to build the plants… Well, look, enjoy it while it lasts. There’s many challengers. Amgen was a challenger. Pfizer was a challenger… Everything that this Viking has, Dave Rick’s working on it at Lily, it has something… But people have to understand, I’ve worked with the FDA, the FDA, once you have a drug, they take their time with the second drug… I find the FDA to be incredibly responsible.”
Overall VKTX ranks 4th on our list of the stocks featured in Jim Cramer’s Lightning Round. While we acknowledge the potential of VKTX 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 timeframe. If you are looking for an 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.