The year is winding down, but the bull markets are still charging ahead, getting a boost from improved sentiment after the presidential election. While the next few months will be a time of transition, a few things are likely. The Trump administration is expected to pursue a far looser regulatory policy than the outgoing Biden government. Plans for individual tax cuts are projected to drive consumer spending, while reductions in corporate taxes could deliver an immediate boost to earnings.
While recent market gains are largely driven by blue-chip giants, penny stocks quietly attract investors seeking untapped growth opportunities. Priced below $5 per share, the penny stocks offer a unique blend of risk and reward, with the potential to double or even triple initial investments.
The nature of these investments presents somewhat of a dilemma. How are investors supposed to separate the penny stocks that are ready to take off on an upward trajectory from those set to remain down in the dumps? This is where Wall Street’s analysts come into play.
We used the TipRanks database to uncover two compelling penny stocks that have earned Strong Buy ratings from the analyst community. According to the pros, these tickers are set to triple or more in the coming year. Let’s take a closer look.
Genelux Corporation (GNLX)
The first penny stock in the spotlight is Genelux, a clinical-stage biotech working in the world of immuno-oncology. Genelux’s research program is focused on the development of the next generation of cancer treatments, using oncolytic virotherapies to create therapeutic agents that can target a wide range of cancers. The company uses vaccinia virus to selectively replicate inside tumor cells and to kill them – while leaving the patient’s normal cells intact.
Genelux’s drug candidates target some of the more difficult-to-treat cancers, including a wide range of dangerous solid tumors, and are developed using the company’s CHOICE discovery platform. This is a proprietary platform that allows for the quick progression of new treatment candidates from early discovery through the clinical trial stages. Using its platform, Genelux has developed its leading oncolytic immunotherapy candidate, Olvi-Vec.
Olvi-Vec has been the subject of several early- and mid-phase clinical trials, but the current excitement around the drug candidate comes from the ongoing Phase 3 trial of the drug as an intraperitoneal (IPe) dosed treatment for platinum-resistant/refractory ovarian cancer (PRROC), a disease that is difficult to treat and has high unmet medical needs. The current Phase 3 trial will enroll up to 186 patients, and the company expects to release topline results in 2H25.
In addition to PRROC track, Genelux also has Olvi-Vec undergoing a Phase 2 trial in the treatment of non-small cell lung cancer (NSCLC). The interim readout for this trial is expected in the middle of next year.
Given these potential clinical milestones and GNLX’s current share price of $2.63, several members of the Street think that now is the right time to pull the trigger.
Roth MKM analyst Benjamin Paluch is particularly upbeat, suggesting that the Phase 3 ovarian cancer trial has the potential to be a game-changer for the stock.
“We view topline results from the Phase 3 study of Olvi-Vec in platinum resistant/refractory ovarian cancer as the key catalyst for the stock. Our base case is the trial is successful and shows a statistically significant progression-free survival (PFS)… Our base case assumes 70% upside with potential for a 100% gain under our bull case scenario and downside potentially limited to 30% under our bear case scenario… Recall, the FDA granted Fast Track designation to Olvi-Vec in platinum resistant/refractory ovarian cancer in November 2023, which suggests to us that the FDA could be flexible with its review, particularly in platinum refractory patients for which therapeutic options are limited,” Paluch opined.
To this end, Paluch rates GNLX a Buy along with a $10 price target. Should his thesis play out, a potential gain of 277% could be in the cards. (To watch Paluch’s track record, click here)
Other analysts don’t beg to differ. 4 Buy ratings and no Holds or Sells have been assigned in the last three months. Therefore, GNLX is a Strong Buy. The $15 average price target implies shares could climb 470% higher in the coming year. (See GNLX stock forecast)
SAB Biotherapeutics (SABS)
The next stock we’ll look at here is another biotherapeutic firm, SAB. This company has a focus on the treatment and prevention of immune and autoimmune diseases, a class of disease conditions that are known for the difficulties they present to both patients and care providers, in the form of dangerous symptoms and resistance to treatment.
SAB has developed an innovative genetic engineering platform, which it uses in the creation of new therapeutic agents. The company aims to develop multi-targeted, high-potency immunoglobulins (IgGs), and to do so without requiring human donors or even the use of convalescent plasma. While every biotech firm likes to say that it is unique, SAB is currently the only company on the scene capable of producing a truly polyclonal human antibody sans donor. These antibodies can be used to target diseases that present serious health challenges.
The company’s leading drug candidate, SAB-142, is a potential blockbuster if it pans out. SAB-142 offers a new approach to the treatment of type 1 diabetes (T1D), through disease modification. This drug candidate is a novel therapy for T1D, being a potentially redosable human antibody under study for its ability to delay the onset of clinical signs in, or the progression of, type 1 diabetes. SAB-142 is not insulin, nor would it require daily monitoring or management; in fact, the company sees a high chance that the drug could be administered on a one-yearly regimen.
In May of this year, SAB Biotherapeutics received clearance from the FDA to begin Phase 1 clinical testing of SAB-142 in the US. Enrollment for the Phase 1 trial has been completed, and the company expects to have a data readout by the end of this year. Early data showed no observation of serum sickness in the enrolled patients. SAB also has a Phase 1 trial underway in Australia, and expects to provide a data readout by year’s end.
These developments have drawn attention from Craig-Hallum analyst Albert Lowe, who has taken a closer look at the stock.
“We believe the company’s unique ability to produce human polyclonal antibodies (pAbs) offers profound opportunities for developing novel therapies, led by SAB-142. SAB-142 has a clear value proposition that builds on rabbit ATG’s (rATG) clinically validated mechanism of action in delaying the onset of T1D. As a human ATG, SAB-142 overcomes the safety limitations of rabbit ATG, making it a redosable disease-modifying therapy that enables long-term T1D disease prevention. We see opportunity for share appreciation as SAB-142 proceeds through development, where clinical data gives us confidence that SAB-142 can be the best-in-class therapy for long-term T1D prevention,” Lowe wrote.
In line with his optimistic take, Lowe rates SABS a Buy and set a price target of $11, which implies a potential upside of 237%. (To watch Lowe’s track record, click here)
Overall, all four of the recent analyst reviews on SABS are positive, making the Strong Buy consensus unanimous. The stock’s $3.26 trading price and $13.50 average target price combine to imply a 323% upside on the one-year horizon. (See SABS stock forecast)
To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
