We recently published a list of 12 Best Growth Stocks to Invest In According to Analysts. In this article, we are going to take a look at where Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) stands against other best growth stocks to invest in according to analysts.
Companies experiencing above-average earnings growth, which is often fueled by innovations and market expansions, are known as growth stocks. However, investing in them requires more than just chasing their rising share prices. These companies typically command higher valuations than their peers, which reflects investor confidence in their future potential. While they offer the prospect of substantial returns, they also come with heightened volatility and are susceptible to economic pressures like inflation and supply chain disruptions. Despite recent market fluctuations, periods of decline can present strategic entry points for long-term investors.
On February 20, Adam Crisafulli, Vital Knowledge founder, and Ryan Detrick, Carson Group chief market strategist, joined ‘Closing Bell Overtime’ on CNBC to discuss the state of the market. Detrick addressed the broadening nature of the market and the lack of panic following recent Fed minutes. He noted that all 11 sectors have increased year-to-date, with 7 sectors outperforming the S&P 500. Detrick highlighted that after two consecutive years of over 20% gains, the market has continued its upward trajectory, showing an increase of over 4%, almost 5%, so far this year. He emphasized that surprises in a bull market typically lean towards positive outcomes and reiterated that the ongoing rotation among sectors is beneficial for investors because it allows for a diversified portfolio.
Crisafulli then shifted the focus to specific companies which are set to report earnings. He connected these companies to trends in digital payments and marketing, emphasizing the role of data in driving customer loyalty and business growth in a modern economy. He discussed a broader theme of valuation reversion among high-multiple stocks and suggested that cheaper segments of the market are starting to catch up in terms of valuation expansion. Detrick added to this by discussing record highs for major indexes such as the S&P 500 and NASDAQ 100, as well as European indices like the DAX and Stoxx Europe 600. He also mentioned gold trading at record levels and questioned whether it is wise to invest at these heights or if the opportunity has passed. Detrick explained that they incorporated gold into their tactical models back in March 2023, adding more during a pullback post-election when the dollar rose sharply. He attributed gold’s rise to central bank indecision and suggested that the US dollar may have peaked. He advocated for including gold in a diversified portfolio, particularly within a 60-40 asset allocation model.
The overall discussion underscored the importance of diversification in investment strategies amidst changing market dynamics.
Methodology
We used stock screeners to compile a list of the top growth stocks. We then selected 12 stocks that had high average upside potential of over 30% and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve 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 pharmacist in a lab coat carefully analyzing a vial of medicine for its quality.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 68
Upside Potential as of February 19: 46.81%
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) discovers, develops, and commercializes life-transforming medicines for a range of serious diseases. With a portfolio of approved therapies, including EYLEA, Dupixent, and Libtayo, and a robust pipeline targeting eye diseases, inflammatory conditions, cancer, and rare diseases, it’s advancing innovative treatments and improving patient outcomes globally.
Dupixent, with over a million patients globally, saw global sales rise 15% to $3.7 billion in Q4 2024. US sales alone rose 10%. EYLEA/EYLEA HD generated combined US sales of $1.5 billion in Q4, capturing 46% of the anti-VEGF (vascular endothelial growth factor) market, with EYLEA HD sales reaching $1.2 billion for the full year. Libtayo saw global sales jump 50% to $367 million in Q4. These commercial successes translated to a 10% year-over-year revenue.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is expanding these franchises through new indications and product enhancements. For EYLEA HD, label expansions and a prefilled syringe are expected to drive uptake. Libtayo is targeting new approvals in skin and lung cancers. Dupixent is expanding into COPD, chronic urticaria, and bullous pemphigoid.
Baron Health Care Fun invested in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) due to its strong track record in drug development, successful existing products, and promising pipeline. This was despite the upcoming patent expirations. It stated the following in its Q3 2024 investor letter:
“We purchased Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a biopharmaceutical company that was built on a foundation in basic scientific research and antibody development. The company has successfully developed several blockbuster medicines, including Eylea and Eylea HD for retinal diseases (such as wet age-related macular degeneration, diabetic macular edema, and diabetic retinopathy) and Dupixent for immunological and inflammatory diseases (such as atopic dermatitis, asthma, and COPD). While Eylea is nearing the end of its patent life and faces potential biosimilar competition, the company has been transitioning patients to Eylea HD, which is a higher dose, longer-acting formulation of Eylea, and Dupixent is growing rapidly through indication expansion. Beyond the current product portfolio, Regeneron has an exciting new product pipeline with over 35 candidates in various stages of development, including a novel treatment for treating severe food allergy, a combination checkpoint inhibitor therapy for melanoma, lung cancer and other solid tumors, biospecific antibodies for blood cancers, and Factor XI antibodies for blood clot prevention, among others. Based on Regeneron’s track record of success discovering and developing new drugs, we are optimistic the pipeline will deliver some successes, which we think will drive upside in the stock.”
Overall, REGN ranks 6th on our list of best growth stocks to invest in according to analysts. While we acknowledge the growth potential of REGN, 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 REGN 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.