Why Alumis (ALMS) Stock Is Advancing Today

Drug maker Alumis (ALMS) is climbing 7% after investment bank Oppenheimer started coverage of the name with an Outperform rating.

Why Oppenheimer Is Bullish on ALMS

Due to concerns about Alumis’ cash reserves and competition, ALMS is changing hands for slightly above the value of its cash reserves, Oppenheimer analyst Jeff Jones reported. However, the company’s pipeline has potential, Jones believes.

A pharmacist looking at a prescription bottle of gastrointestinal drugs.

He stated that data from a Phase 2 trial suggests that ALMS’ ESK-001 drug candidate may become the best available treatment for psoriasis. ESK-001 could generate $2 billion of revenue, the analyst asserted.

Another potential treatment, A-005, may be used to combat a number of neuroinflammatory conditions, including multiple sclerosis. Alumis is preparing to conduct a Phase 2 trial on A-005, Oppenheimer reported.

Also importantly, Jones is upbeat on the company’s management team. That’s because the same group previously was in charge of Principia Biopharma which wound up being acquired by Sanofi (SNY) in 2020 for $3.7 billion, Jones explained.

The analyst placed a 12–18-month price target of $32 on ALMS.

The Price Action of ALMS

In the last month, the shares have fallen 15%, while they have slumped 39% in the last three months.

While we acknowledge the potential of ALMS, our conviction lies in the belief that some 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 ALMS 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.