Are you looking for undervalued stocks to buy? If so analysts on Wall Street think there are at least a few stocks in the healthcare sector that deserve more attention than they've been getting lately.
Telehealth, vaccines, and genetic testing could make these stocks huge winners down the road. Here's why the average analyst following these them thinks they could rise by 46% or better.
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1. Hims & Hers Health
Hims & Hers Health (HIMS +11.12%) shares spiked shortly after the company made its stock market debut in January. But it's given up around 46% since reaching a peak in February.
Wall Street analysts who follow this niche telehealth service provider think the stock is about to rebound. The average price target for Hims & Hers suggests a 46% premium over recent prices.
Connecting people with physicians ready to prescribe drugs for sexual health and wellness is a big business that's growing fast. But the stock took a beating because the blistering pace of growth Hims & Hers reported before going public subsided after its public listing.
During the three months ended June 30, total revenue soared 69% year over year to $60.7 million. Despite the rapid growth, this is still just a drop in the bucket compared with the overall market for personalized healthcare services.
Hims & Hers Health could become a lot more popular in 2022. Walgreens recently agreed to carry its branded supplements and sexual health solutions. An expansion to more than 7,000 Walgreens stores will go a long way to boost awareness of the company's more lucrative online prescription writing service.
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2. Novavax
Novavax (NVAX 0.57%) stock peaked around the same time as Hims & Hers. Since reaching an all-time high in February, though, the stock has given up more than half its value.
Investment bank analysts on Wall Street who follow Novavax think a rebound is in the cards. The consensus target for Novavax right now is 67% higher than the stock's recent price.
Disappointing third-quarter earnings results from Moderna recently pushed down shares of vaccine stocks across the board. Without a revenue stream yet, Novavax's stock price is extremely vulnerable to any change to vaccine sales expectations.
More than a few of my colleagues are willing to overlook Novavax's inability to show regulators its finished product will be identical to the vaccine that succeeded in clinical trials. I'm not. Biotech investing is risky enough when you buy companies that haven't already committed disastrous unforced errors.
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3. Invitae
Invitae (NVTA +0.00%) stock has lost around half its value since reaching a peak near the end of 2020. Wall Street analysts who follow this genomics stock think it can gain it all back. The consensus price target for Invitae right now suggests the stock can rise around 54% from its recent prices.
The stock's fall this year has more to do with investors fleeing from tech stocks in general than any trouble with the business of providing genetic testing services. Invitae still hadn't reported third-quarter earnings at the time of writing, but results from the first half of 2021 were more than encouraging. Second-quarter revenue soared 152% year over year to $116.3 million as the number of tests processed increased 154% year over year.
Invitae's claim to fame is an all-in-one solution for genetic testing with an eye to the future of medicine. Generally speaking, we've only begun to leverage the power of genetic testing as a tool for improving public health because it's nearly impossible to share test results between patients, physicians, insurers, and government payers.
In September, Invitae acquired Citizen, a company that helps individuals take control of digital health records. Invitae's trying to aggregate results from the world's genetic tests into a single easy-to-use service. Folding in Citizen's operations could allow Invitae to reach that ambitious and highly lucrative goal.
