After some recent losses, markets showed bullish moves during Wednesday’s after-hours trading session. This rebound coincided with Federal Reserve Chairman Jay Powell’s announcement that there would be no further interest rate hikes for the foreseeable future.
The rally in the markets highlights the volatility of current conditions – but that’s by no means a bad thing, at least to a market expert.
John Stoltzfus, chief investment strategist at Oppenheimer, gives a clear explanation of where the market is now: “We continue to see some short-term profit-taking in daily market activity, particularly in growth segments that have experienced an extraordinary upturn from last year into this year quite normal. Such activity, combined with a process of rebalancing and rotation into other segments of the stock market, can, in our opinion, be healthy and contribute to the broadening of the market performance from last year into this year.”
Stoltzfus further explains why this is beneficial for risk-tolerant investors, adding: “Short-term volatility, in our view, could continue to present an opportunity for investors to ‘catch babies that are thrown out with the bathwater’ during periods of market decline.” Drafts , as the market digests a level of uncertainty that is not uncommon in times of transition such as these and at a time of rising geopolitical risks.”
The stock analysts at Oppenheimer support this assessment and predict strong rallies – over 100% – for two healthcare stocks in particular. We ran them through the TipRanks database to find out what sets them apart. Let’s take a closer look.
Avalo Therapeutics (AVTX)
We are starting into the world of biopharmaceuticals with Avalo Therapeutics. This company’s work focuses on the treatment of immune system disorders, particularly those caused by immune system dysregulation. The Company has a pipeline of active research projects targeting a variety of autoimmune and/or inflammatory diseases. This is a worthwhile field for a biotech company because these diseases are often difficult to treat effectively and therefore there is a high unmet medical need.
The company’s lead drug candidate, AVTX-009, was acquired by Avalo in March this year through an acquisition of AlmataBio. The drug candidate is an anti-IL-1β mAb that is considered ready for Phase 2 testing. A phase 2 study is planned for the drug candidate for the treatment of hidradenitis suppurativa. The first data is expected to be published in 2026. The company sees great potential in AVTX-009 and plans to use the drug candidate in at least one additional chronic inflammatory indication to be determined.
Advancing clinical research into late-stage trials isn’t cheap, but Avalo is in a solid position to fund its research programs. In March of this year, the Company completed a private placement financing that was expected to raise approximately $185 million in gross proceeds and $105 million in upfront net proceeds. The company expects its liquidity to be sufficient to finance operations until 2027.
Analyst Leland Gershell studies this stock for Oppenheimer and assesses the company’s potential earnings. He assumes success with AVTX-009. Gershell writes: “We view AVTX-009 as a promising drug candidate with the potential to address a major unmet need in inflammatory diseases. We rate the shares Outperform as we look forward to a topline Phase 2 publication in 2026 in HS and further updates on another important autoimmune disease. We are optimistic that Phase 2 will pave the way for regulatory development to integrate a pen auto-injector for the commercial market. We forecast peak penetration of 15% and assume a launch price of $75,000 in 2029, consistent with approved biologics. We see peak sales of around $400 million in HS alone in the US.”
The analyst’s Outperform (i.e. Buy) rating is complemented by a $35 price target that implies a robust 119% upside potential for the year ahead. (To view Gershell’s track record, click here)
Micro-cap biopharmaceuticals don’t always get a lot of attention from analysts, and currently Gershell’s only AVTX report is known.
AngioDynamics (ANGO)
Next on our Oppenheimer list is AngioDynamics, another technology-focused company in the medical space, but one that focuses on medical devices rather than therapeutic drugs.
AngioDynamics was founded in 1988 and its innovative products target various medical specialties, including interventional radiologists, interventional cardiologists and surgeons. The company’s devices are used in the diagnosis of cancer and peripheral vascular diseases and operate in a minimally invasive manner.
AngioDynamics has an extensive product list that is used in a variety of applications. Notable devices include the AlphaVac, used in endovascular therapies; the NanoKnife, used in localized oncology treatments; and the Auryon, used in endovascular treatments for peripheral atherectomy technology. The company makes these and many other devices available in over 50 markets worldwide – the United States, Europe, Asia and Latin America. AngioDynamics operates through a network of direct sales and distributors and continually works to improve and adapt its product lines.
Earlier this month, the company released its financial results for the third quarter of 2024. On the bottom line, the company reported total revenue of $66 million, a result that increased 8% year-over-year, while on the bottom line there was a net loss of 16 cents per share based on non-GAAP metrics.
Of the company’s total revenue, MedTech accounted for $25.7 million, while Medical Devices accounted for $40.3 million. During the quarter, AngioDynamics successfully completed a divestiture of several product portfolios, particularly its PICC and midline products.
Despite a 26% decline in ANGO shares this year, Oppenheimer analyst Steven Lichtman, who has a 5-star rating from TipRanks, remains optimistic about the company’s growth prospects
“ANGO is focused on accelerating growth by focusing investments on its higher-margin med-tech product lines – Auryon, AngioVac/AlphaVac and NanoKnife. The company has several pipeline opportunities ahead, including expanding AlphaVac to PE, Auryon to DVT, and expanding the NanoKnife indication. “While competition remains fierce in ANGO’s core market, new pipeline products are poised to contribute, the company has strengthened its balance sheet and shares are trading at less than 1x FY25E EV/sales,” said Lichtman.
To quantify his stance on ANGO, Lichtman gives the stock an Outperform (i.e. Buy) rating with a $12 price target, suggesting a 107% gain over the next 12 months. (To view Lichtman’s track record, click here)
Although there are only three recent analyst reviews for this stock, everyone agrees that these are stocks to buy – resulting in a unanimous Strong Buy consensus recommendation. The stock is priced at $5.79 and its average price target of $14.67 implies a robust 153% upside potential for the coming year. (See ANGO stock forecast)
To find good stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ stock insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.