Which small-cap stocks look attractive currently? According to Wall Street analysts, the three stocks discussed below have earned a Strong Buy consensus rating and have the potential to appreciate more than 20% in the next twelve months.
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To find these stocks, we leveraged the TipRanks’ Stock Screener tool and filtered small-cap stocks with Strong Buy ratings and attractive upside price potential. A small-cap stock is defined as the stock of a company with a market capitalization between $300 million and $2 billion. These stocks have the potential to outperform expectations when macroeconomic conditions are favorable. Small-cap stocks carry a higher risk-reward profile than large-cap stocks. Investors must conduct thorough research before deciding to invest in them.
Prothena Corporation PLC (PRTA) – Prothena is a late-stage clinical biotechnology company, focusing on developing medicines for treating neurodegenerative and rare peripheral amyloid diseases. On TipRanks, PRTA has a Strong Buy consensus rating based on five Buys and one Hold rating. The average Prothena price target of $69.83 implies 247.1% upside potential from current levels. Shares have fallen 44.6% year-to-date. Analysts are highly encouraged by Prothena’s promising pipeline of drugs and advancement in clinical trials.
On August 8, Prothena reported Q2 total revenue of $132.01 million, primarily from its collaboration with Bristol-Myers Squibb (BMY). Remarkably, PRTA’s diluted earnings per share (EPS) grew to $1.22 from a loss of $1.03 in Q2 FY23.
Zai Lab Ltd. (ZLAB) – Zai Lab is a commercial-stage biopharmaceutical company with a presence in China and the U.S. The company focuses on developing novel treatments for oncology, autoimmune disorders, infectious diseases, and neurological disorders. With three unanimous Buy ratings on TipRanks, ZLAB has a Strong Buy consensus rating. The average Zai Lab price target of $40.67 implies a nearly 150% upside potential from current levels. Meanwhile, ZLAB shares have declined 40.5% so far in 2024.
ZLAB reported solid Q2 FY24 results on August 6. Product revenue jumped 45% year-over-year to $100.1 million, backed by growing sales of commercialized drugs ZEJULA and NUZYRA and the newly launched drug VYVGART. At the same time, diluted loss per ADS improved to $0.82 from $1.25 reported in Q2 FY23. Analysts are impressed by VYVGART’s upgraded revenue guidance and the expected top-line data from the clinical trials.
Sana Biotechnology Inc. (SANA) – Sana Biotechnology develops engineered cells as medicines for patients, with the ambition to repair and control genes in cells or replace missing or damaged cells. With four Buys and one Hold rating, SANA has a Strong Buy consensus rating on TipRanks. Also, the average Sana Biotechnology price target of $12.80 implies 161.8% upside potential from current levels. Shares have gained 12.8% year-to-date.
Sana is a pre-revenue company making headway in various clinical trials that are in different stages. Analysts expect positive data read-outs from some of Sana’s clinical trials by the end of 2024. Moreover, analysts think that Sana’s healthy cash reserves provide sufficient support for the ongoing research and development activities.
To find more small-cap investment ideas like these, you can take a look at TipRanks’ Stock Screener tool.
