Cathie Wood is one of the most influential investors in the world. She is the founder and CEO of ARK Invest, a firm that specializes in disruptive innovation and technology. ARK Invest manages several exchange-traded funds (ETFs) that have delivered stellar returns for investors in 2023.
Which Cathie Wood stock picks stand out from their crowd from a growth standpoint? Beam Therapeutics (BEAM -1.02%), COMPASS Pathways (CMPS 1.02%), and 908 Devices (MASS 1.98%) are three ARK Invest holdings with strong buy ratings and exceptionally high price targets from the analysts who cover them. Read on to find out more about these innovative growth companies.
Beam Therapeutics: A play on base editing
Beam Therapeutics is pioneering a new gene-editing approach called base editing. Base editing enables highly accurate, single-letter alterations in the DNA code, making it a powerful approach to treating genetic-based diseases.
Beam has several programs in preclinical and early-clinical stages. The company's pipeline is targeting a host of inherited disorders, such as sickle cell disease, beta-thalassemia, and glycogen storage disease, along with several undisclosed targets. Additionally, the company has partnered with some of the biggest names in the industry, such as Pfizer.
Most analysts are extremely bullish on its future growth potential. The average price target for the stock is $63.93, which represents a 177% increase from current levels. Moreover, 11 out of 16 analysts covering the stock have a buy rating on it, while only 5 have it rated as a hold. None of the analysts have rated Beam's stock as a sell as of this writing.
However, investors should also be aware of the high risk involved in investing in this biotech stock. The company's innovative platform is still unproven and may not produce a successful product. Therefore, investors should carefully weigh the potential reward against the considerable risks associated with buying shares at this early juncture.
COMPASS Pathways: A leader in psychedelic medicine
Compass Pathways is a mental healthcare company developing a novel therapy for treatment-resistant depression (TRD). TRD is a severe form of depression that does not respond to conventional antidepressants. It affects about 100 million people worldwide and has a high risk of suicide.
Compass' therapy involves the use of psilocybin, a psychedelic compound found in magic mushrooms, in conjunction with psychological support. Psilocybin has been shown to induce profound changes in brain activity and mood and to help patients access and process emotional memories.
The mental healthcare company is conducting two phase 3 clinical trials for its psilocybin therapy for TRD known as COMP360. Top-line data from these trials are due out in the second half of 2024 and mid-2025, respectively.
If successful, the company could seek regulatory approval for its novel TRD therapy perhaps as soon as late 2025. Peak sales for the drug have been estimated at over $3.7 billion, which is a hefty sum for a company with a sub-$500 million market cap at present.
Wall Street analysts are exceptionally bullish on Compass' potential. The average price target for the stock is $41.67, implying a 382% upside potential from its current share price. Like Beam Therapeutics, however, Compass is also a high-risk growth play due to the unique dynamics involved in the development of a novel psychedelic medicine.
908 Devices: A next-generation chemical/biomolecular processing company
908 Devices is a life sciences company developing innovative devices for chemical and biomolecular analysis. The company's products are based on its proprietary mass-spectrometry technology, which can rapidly and accurately identify molecules from complex samples.
908 Devices' products have applications in various markets, such as biopharma, bioprocessing, forensics, safety and security, and diagnostics. The company's product lineup consists of both handheld and desktop devices, all of which can perform high-quality chemical and biochemical analyses in minutes compared to weeks for more traditional, lab-based approaches.
Wall Street analysts are very enthusiastic about 908 Devices' growth prospects. The average price target for the stock is $17, implying a 136% upside from its current price. All five analysts who cover the stock also have a buy rating on it.
That being said, 908 Devices is still in its infancy, and there's no guarantee that it will be able to build the market fast enough to reach profitability within a reasonable time frame. Prospective investors, in turn, should probably keep any starter position on the small side for the time being.
