BHVN - 3 Biotech Stocks to Buy on the Dip: April 2024

2024-04-26 06:00:00 ET

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If you follow Warren Buffett’s advice of being greedy when others are fearful, then it probably makes sense to consider biotech stocks to buy on the dip.

Primarily, the thesis centers on the underlying necessity of the ecosystem. While humans have made incredible innovations in the digital realm, those don’t mean a whole lot if we succumb to various diseases and conditions. So, from the standpoint of social progress, the biotechnology sector is critical.

Moreover, the industry may be somewhat insulated from outside economic pressures. Nothing is immune from broad fundamentals, to be sure. However, the aforementioned importance of finding medical solutions should keep the wheels turning.

On that note, below are biotech stocks to buy on the dip.

Biohaven (BHVN)

Based in New Haven, Connecticut, Biohaven (NYSE: BHVN ) focuses on discovering, developing and commercializing therapies for immunology, neuroscience and oncology. Its product pipeline includes Troriluzole , which is undergoing Phase 3 clinical trials for the treatment of neurological and neuropsychiatric illnesses. BHVN has attracted attention as one of the biotech stocks to buy on the dip because of its endorsement by Wall Street experts.

According to TipRanks, Biohaven features a unanimous strong buy rating . Further, the average price target stands at $60.14, implying over 55% upside potential. The high-side target is $66 while the least-optimistic price target is $55. That still implies 42% growth potential, making Biohaven a compelling idea.

For the current fiscal year, covering experts anticipate that Biohaven can post $10.01 million in revenue. That doesn’t seem like much until you consider that the company is a pre-revenue business. Further, for fiscal 2025, analysts are seeking revenue of $15.99 million or nearly 60% up from projected 2024 sales.

Cytokinetics (CYTK)

Hailing from South San Francisco, California, Cytokinetics (NASDAQ: CYTK ) is a late-stage biopharmaceutical firm focusing on the discovery, development and commercialization of muscle activators and inhibitors as potential treatments for debilitating diseases. One of its candidates includes omecamtiv mecarbil , a novel cardiac myosin activator that is in Phase 3 clinical trials in patients with heart failure.

Since the start of the year, CYTK stock lost almost 21% of its equity value. However, the red ink appears to be subsiding, making it one of the biotech stocks to buy on the dip. More importantly, analysts peg shares as a consensus strong buy with a $100.42 average price target. That implies over 50% upside potential. Notably, the low-side estimate calls for $77, which still represents a 15% jump from the current price.

Financially, experts don’t see much excitement for the current fiscal year. Indeed, sales are projected to fall significantly. However, fiscal 2025 is a different matter altogether, with analysts forecasting revenue of just under $145 million. That would be a gargantuan leap from 2024’s projected sales of $6.41 million.

Viking Therapeutics (VKTX)

Headquartered in San Diego, California, Viking Therapeutics (NASDAQ: VKTX ) is a clinical-stage biopharma focusing on the development of novel therapies for metabolic and endocrine disorders. Per its corporate profile , Viking’s lead drug candidate is VK2809 , an orally available tissue and receptor-subtype selective agonist that is in Phase 2b clinical trials to treat patients with biopsy-confirmed non-alcoholic steatohepatitis.

Notably, VKTX stock is a strong performer, gaining 256% of equity value since the start of the year. However, the price has come down significantly since late February. Therefore, it’s possible that VKTX could be a candidate for biotech stocks to buy on the dip.

Another factor pushing the needle favorably is the expert endorsement. Currently, analysts rate shares a unanimous strong buy with a $113.50 average price target. That implies over 74% upside potential. Further, the $90 low-side target is still guiding for a 38% return.

To be fair, Viking is a narrative play. It presently doesn’t generate any sales. However, with analysts issuing buy ratings since May of last year, VKTX seems like smart speculation.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .

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