What happened

Shares of rare-disease specialist Amicus Therapeutics (NASDAQ:FOLD) are marching higher today. Specifically, the drugmaker's stock is up by 10% as of 12:45 p.m. EST. 

What's driving this double-digit rally today? The biotech's shares are jumping in response to a noteworthy upgrade from Cantor Fitzgerald's analyst Eliana Merle. The big-ticket item is that Merle's forward-looking price target of $20 per share implies a whopping 124% upside potential -- that is, relative to where the biotech's stock closed on Monday.  

Stacks of wooden blocks with upward-facing arrows on them grow taller as they move to the right.

Image source: Getty Images.

So what

Prior to today's hefty rally, Amicus' stock was clearly stuck in a rut. Weighed down by concerns over a rival Pompe disease treatment from French drug giant Sanofi and an already-rich valuation, Amicus' stock had been slowly losing ground since the end of the first quarter of 2019. In short, investors were growing increasingly concerned that Amicus' sky-high valuation may not be justified. Cantor, for its part, apparently doesn't think the biotech's eye-popping price-to-sales ratio of 15.7 is a problem in the least. 

Now what

Is it time to buy? Amicus' experimental Pompe disease treatment known as AT-GAA could one day generate upwards of $2 billion in sales. So, if that line holds true, the biotech's stock should not only double from current levels, but it could easily triple in value within a few short years. As such, it might indeed be worthwhile to take a flier on this top orphan drug stock on the heels of this overwhelmingly positive analyst upgrade.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.