Viking Therapeutics (VKTX)
One of the small-cap stocks to buy is Viking Therapeutics (NASDAQ:VKTX). It is well-positioned to break into the lucrative weight loss “miracle” drugs market with its first-in-class candidate VK2735. It recently completed positive Phase 1 clinical trials on its candidate, sending the stock price soaring 270% higher. Since then, the stock has stabilized a tad lower and trades nearly double the pre-news level. As Ozempic has become synonymous with several new drugs that help reduce weight and provide substantial revenue in that area, the company may benefit from its entry into that arena.
Despite recent gains, analysts still consider the stock undervalued and expect an average target price of $113.8, representing a 57% upside. The company recently completed a stock offering to raise $630 million in cash. This compares favorably to the reported net loss of only $27.4 million last quarter. Viking has substantial capital and should be able to advance its drug candidate towards approval without having to dilute its shares.
€‹Celsius Holdings (CELH)
The second pick in this list of small-cap stocks to buy is energy drink and liquid supplement company Celsius Holdings (NASDAQ:CELH). The firm has seen its share price increase 75% since its recent low in February after reporting 37% annual sales growth. In addition, it even reported a more substantial beat, with a profit gain of 89%.
As it looks to break into new markets to gain market share aggressively, it can continue boosting sales. It has sizable cash reserves of $880 million to support this effort, accumulated by not paying dividends and retaining all income. This positions Celsius firmly in the growth stock category, making it a matching candidate as one of the small-cap stocks to buy.
Investors still see a substantial upside for the company even after recent gains, as it has beaten EPS estimates for several quarters now. The consensus average price target is $93.31 per share, and virtually all analysts rate it a buy.
Hippo Holdings (HIPO)
The final pick in this list of small-cap stocks to buy is Hippo Holdings (NYSE:HIPO). The company provides online insurance and loan technology for homes and mortgages. When the Fed cuts interest rates, the housing industry is expected to see an increase in sales, implying a greater need for Hippo’s services.
The home insurance innovator’s share price has more than doubled since the start of the year, as investors believe it will benefit from secular trends in the lending industry. The company saw its most recent gains after reporting solid first-quarter earnings, with revenue more than doubling and losses decreasing 49%.
Analysts who underestimated the company’s growth in the previous period see a potential upside of 13%, with a price target of $24.70 per share. Almost all analysts rate the company as a buy, seeing sales growth of 87.50% year-over-year (YOY) in June and growth estimates of 57.70% next year compared to S&P500’s 13%.
On the date of publication, Stavros Tousios 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.
Stavros Tousios, MBA, is the founder and chief analyst at Markets Untold. With expertise in FX, macros, equity analysis, and investment advisory, Stavros delivers investors strategic guidance and valuable insights.