Fundamentally, the biotechnology sphere enjoys a powerful catalyst: wealth without health means nothing. Yes, it’s important to save money and invest for the future. At the same time, investing in one’s health is even more important. You can always make more money. You can’t always gain more wellness. With that in mind, the below biotech stocks to buy on the dip are even more compelling.
Again, the sector is supremely relevant. Therefore, any volatility in established or otherwise strong enterprises should eventually be ameliorated. What’s more, the underlying sector could see tremendous expansion. According to Precedence Research, the global biotech market reached a valuation of $1.38 trillion last year. By 2033, the space could be worth $4.25 trillion.
If that forecast holds true, we would be talking about a compound annual growth rate (CAGR) of 11.8%. That could be on the more conservative end. For example, Grand View Research believes that the sector may rise at a CAGR of nearly 14% to 2030, ultimately culminating in a valuation of $3.88 trillion.
Whatever the case, the industry is incredibly pertinent. On that note, below are biotech stocks to buy on the dip.
Collegium Pharmaceutical (COLL)
Based in Stoughton, Massachusetts, Collegium Pharmaceutical (NASDAQ:COLL) focuses on pain management medications. One of its main products is called Xtampza, which features a unique abuse-deterrent formulation. Of course, the relevance here is that Collegium helps address the long-term opioid addiction that has plagued the country. Still, COLL has gotten off to a slow start after starting the year so swimmingly.
For example, in the past three months, COLL stock has lost more than 7% of its equity value. However, the red ink could make Collegium one of the biotech stocks to buy on the dip. For one thing, the company has been consistently beating its bottom-line targets. Between the second quarter of 2023 and Q1 2024, Collegium’s average earnings per share reached 78.5 cents. This translated to an average earnings surprise of 24.4%.
For fiscal 2024, covering experts anticipate a big jump in EPS to $6.25. Last year, the biotech posted only $1.29. On the top line, sales may rise 3% to reach $583.68 million. The most optimistic revenue target calls for $590.18 million. Overall, it’s a solid idea for biotech stocks to buy on the dip.
Amphastar Pharmaceuticals (AMPH)
Headquartered in Rancho Cucamonga, California, Amphastar Pharmaceuticals (NASDAQ:AMPH) falls under the drug manufacturing category. The company offers a wide range of products, including injectable, inhalation and intranasal products. Its main focus is on developing generic versions of high-cost pharmaceutical products. That’s quite a relevant directive amid the challenging economic environment.
At the moment, the market doesn’t quite see what the fuss is about. Since the start of the year, AMPH stock slipped 35%. That’s obviously not a great look. However, it’s also a candidate for biotech stocks to buy on the dip thanks to its longer-term potential. For a start, the financials have been impressive. During the past four quarters, the average EPS came out to 93 cents.
This print translated to an earnings surprise of 21.43%. The company only missed once in the past four quarters in Q4. During the trailing 12 months (TTM), it generated net income of nearly $155 million on sales of $676.21 million.
For fiscal 2024, analysts are looking for sales to rise 16.7% to hit $752.11 million. Thus, AMPH makes a good case for biotech stocks to buy.
Royalty Pharma (RPRX)
Operating out of New York City, Royalty Pharma (NASDAQ:RPRX) operates as a buyer of biopharmaceutical royalties. It also funds innovations in the biopharmaceutical ecosystem. Thanks to its distinct business profile, Royalty enjoys a diversified revenue stream. It’s had its hands in some of the world’s best-selling therapies, making RPRX an enticing investment idea.
Right now, the market admittedly has other ideas. Since the beginning of the year, RPRX stock lost almost 5% of equity value. In the trailing 52 weeks, it’s down more than 13%. Still, it makes a solid case for biotech stocks to buy on the dip due in part to its financial performance. During the past four quarters, the company’s EPS reached 94 cents. This translated to an earnings surprise of 5.38%.
During the TTM period, Royalty posted net income of just under $799 million on sales of $2.24 billion. For fiscal 2024, experts anticipate a conspicuous dip in EPS to $3.87. However, sales could experience a 10.4% lift to $2.6 billion. In the following year, revenue may rise again by the same magnitude to hit $2.87 billion.
Harmony Biosciences (HRMY)
Based in Plymouth Meeting, Pennsylvania, Harmony Biosciences (NASDAQ:HRMY) is a commercial-stage pharmaceutical specialist. It focuses on developing and commercializing therapies for patients with rare and other neurological diseases. While Harmony operates in certain niche treatment segments, its flagship products have generated strong sales expansion and market penetration.
Despite the promising outlook for HRMY stock, Wall Street is a bit unsure what to make of it. Since the beginning of this year, shares have lost a bit more than 2%. In the past 52 weeks, they’re down more than 18%. Nevertheless, Harmony makes a powerful case for biotech stocks to buy on the dip. Notably, analysts rate shares a consensus moderate buy with a $43.86 average price target.
On the financials, the biotech has been wobbly in three of the past four quarters. In the TTM period, net income came out to $137.7 million on sales of $617.51 million. Still, investors may just need to exercise patience.
For fiscal 2024, covering experts forecast the top line to expand by 22%. If so, that would translate to revenue of $709.82 million.
Genmab (GMAB)
Based in Denmark, Genmab (NASDAQ:GMAB) develops antibody therapeutics for the treatment of cancer and other diseases. It’s one of the world’s top leaders in the development of antibody-based therapies. Further, the company has strong partnerships with major international pharmaceuticals, thus affording it financial stability along with expanded market opportunities.
However, it’s the equities market that’s presently not seeing the positive outlook with GMAB stock. Since the beginning of January, the security stumbled nearly 19%. In the past 52 weeks, the biotech firm lost more than 32% of market value. However, it legitimately makes a case for biotech stocks to buy on the dip. Despite some really shaky earnings performances (hence the red ink), it’s projected to recover.
For fiscal 2024, analysts are looking for EPS of $1.11. If so, that would imply a 15.6% expansion from last year. On the top line, sales could hit $2.85 billion, up 19.4% from 2023’s print of $2.39 billion. And fiscal 2025 could see revenue rise again to $3.45 billion.
Genmab had an outstanding earnings beat in Q1 2024 with a surprise of 107.1%. Therefore, circumstances are looking more auspicious.
RegenXBio (RGNX)
Headquartered in Rockville, Maryland, RegenXBio (NASDAQ:RGNX) is a clinical-stage biotech firm that provides gene therapies. It aims to deliver functional genes to cells with genetic defects. While a riskier idea among biotech stocks to buy on the dip due to its clinical-stage profile, its focus on treatments for retinal, metabolic and neurodegenerative diseases could be a gamechanger.
Admittedly, the market isn’t exactly enthralled with RGNX stock. Since the start of the year, the security suffered a loss of more than 34%. In the trailing 52 weeks, it’s down nearly 38%. It’s also not entirely clear when the volatility will fade. For instance, in the last business week, RGNX lost almost 7% of market value. Still, it could be a dip-buying opportunity.
During the TTM period, RegenXBio lost $260.15 million on sales of $86.73 million. However, it’s looking to bounce back in the long run. Fiscal 2024 sales calls for $103.14 million, up 14.3% from last year. More importantly, experts believe that in fiscal 2025, revenue could reach $279.61 million. If so, we’re talking about a growth rate of 171.1%.
Pliant Therapeutics (PLRX)
Operating out of South San Francisco, California, Pliant Therapeutics (NASDAQ:PLRX) is another clinical-stage enterprise. Here, the biopharma is focused on the discovery, development and commercialization of novel therapies for the treatment of fibrosis and related diseases. One of the key advantages of Pliant is that it features a strong pipeline, with multiple product candidates in differing stages of development.
Right now, that hasn’t exactly convinced Wall Street to gamble on PLRX stock. Since the beginning of the year, shares have lost nearly 39% of equity value. In the trailing 52 weeks, they’re down more than 48%. It’s also not entirely clear when the volatility will finally pass. In the past month, PLRX slipped 22.5%, worrying anyone who isn’t an extreme speculator.
Still, it could be one of the biotech stocks to buy on the dip, provided that you are a seasoned contrarian. At the onset, circumstances don’t look great. TTM net loss sits at $170.74 million while revenue is only $248,000.
However, getting past fiscal 2024 – which may be a very soft year – circumstances could shift dramatically in fiscal 2025. That’s when sales could soar to $3.2 million. Moreover, the most optimistic view calls for $20 million.
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.
