SpringWorks Therapeutics (SWTX): Among the Best Performing Mid Cap Stocks to Buy According to Analysts

We recently published a list of 10 Best Performing Mid Cap Stocks to Buy According to Analysts. In this article, we are going to take a look at where SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) stands against other best performing mid cap stocks to buy according to analysts.

On February 7, Simeon Hyman, Global Investment Strategist at ProShares Advisors, appeared on CNBC to discuss the upcoming jobs report and its expected impact on the market. He believes that the market will hold up, and particularly cites mid-cap stocks as an optimal balance for risk and return. He noted that the economy has shown strength in various sectors, such as the ISM manufacturing index, which recently beat expectations. This broadening of economic growth suggests that the jobs numbers might be decent. Hyman also highlighted the positive earnings growth in the S&P 500, with about three-quarters of companies reporting a 12% year-over-year increase, which is encouraging news.

Recently, the mega-cap tech stocks have shown some weakness despite the overall market being on pace for a winning week. Hyman observed that while this broadening of market performance is positive, it also indicates risk, given that the tech sector still accounts for over 30% of the S&P 500 and remains in the red for the year. His word of the day was mid-caps, which he believes are historically the sweet spot in the market. Mid-caps have outperformed both large and small-cap stocks over the decades. Currently, mid-caps are undervalued, offering investors about $0.50 on the dollar, a situation that hasn’t occurred with small caps despite their underperformance. The key advantage of mid-caps is their earnings growth, which sets them apart from small-caps. When discussing mid-caps versus small caps, Hyman highlighted that mid-caps also have a strong domestic focus, with about 75% of their revenues coming from domestic sources. This is similar to small caps but with a crucial difference: mid-caps generally offer higher quality than small caps, lacking the losses and negative earnings often seen in small-cap companies. This makes mid-caps an attractive option for investors looking for stable growth.

Methodology

We used the Finviz stock screener to compile a list of the best-performing mid-cap stocks that were trading between $2 billion and $10 billion. We then picked the top 10 stocks with year-to-date gains higher than 20% and an average upside potential of over 25%. 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.

Note: All data is as of February 24.

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).

Is SpringWorks Therapeutics Inc. (SWTX) the Best Performing Mid Cap Stock to Buy According to Analysts?

A closeup of a scientist in a lab coat, mixing two liquids for a compound to treat rare diseases.

SpringWorks Therapeutics, Inc. (NASDAQ:SWTX)

Year-to-Date Performance as of February 24: 55.63%

Upside Potential as of February 24: 28.00%

Number of Hedge Fund Holders: 40

SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) is a commercial-stage biopharmaceutical company that develops therapies for rare diseases and cancer. Its lead product, OGSIVEO, targets desmoid tumors and it has a pipeline of MEK and BRAF inhibitors that are aimed at various solid tumors.

In Q3 2024, OGSIVEO generated $49.3 million in net product revenue, which was a 23% sequential increase. This growth was fueled by the demand from new and existing patients who experienced clinical benefits. The OGSIVEO launch has been highly successful, positioning it as the standard systemic therapy for desmoid tumors. Market research indicates significant growth potential, as only a fraction of eligible patients have been reached by now. The introduction of new tablet strengths and blister packaging has improved patient convenience and adherence.

In September, over 800 patients filled OGSIVEO prescriptions, and 65% have transitioned to blister packs, which improves refill predictability. The estimated patient population has increased from 5,500-7,000 to ~10,000, based on new diagnosis code data. OGSIVEO is prescribed at 420 treatment centers, with 57% of prescribers in community settings. Physician feedback highlights OGSIVEO’s efficacy and tolerability, with 90% intending to use it as frontline treatment. 60% of physicians expect to increase their OGSIVEO usage. Global expansion is also underway, with EU regulatory reviews and planned launches in Europe and Japan. Long-term data shows continued tumor reduction and symptom relief with OGSIVEO. SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) is confident in its continued growth.

Overall, SWTX ranks 9th on our list of best performing mid cap stocks to buy according to analysts. While we acknowledge the growth potential of SWTX as an investment, 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 SWTX 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.