IMTX: 3 Small-Cap Healthcare Stocks With Big Upside Potential

Small-cap healthcare companies are companies with a market capitalization of up to $2 billion, which often go unnoticed, but they hold immense potential for investors seeking high-growth opportunities. These companies are typically at the forefront of innovation, focusing on niche markets or groundbreaking therapies.

Below, I have highlighted three small-cap healthcare stocks: Verve Therapeutics, Inc. (VERV - Get Rating), Immatics N.V. (IMTX - Get Rating), and Esperion Therapeutics, Inc. (ESPR - Get Rating), offering significant upside potential.

The key driver of small-cap healthcare companies is their focus on specialized treatments. Many of these companies are involved in developing therapies for rare diseases or unmet medical needs, which often come with lucrative market exclusivity periods. The successful commercialization of even a single product can lead to exponential growth for these firms.

According to Deloitte’s outlook, 2025 might be a turnaround period for the healthcare sector driven by innovation, resilience, and strategic growth. As global healthcare spending continues to rise, fueled by aging populations and increased focus on innovation, small-cap companies will likely see sustained demand for their specialized offerings.

The global healthcare market is projected to reach $44.760 trillion by 2032, exhibiting a CAGR of 9.1%. This growth signifies increased investment and innovation, driving further advancements and improvements in patient care.

With that in mind, let’s delve into the fundamentals of the three Biotech stock picks, starting with the third choice.

Stock #3: Verve Therapeutics, Inc. (VERV - Get Rating)

With a market cap of $508.83 million, VERV is a clinical-stage genetic medicines company that engages in developing gene-editing medicines for patients to treat cardiovascular diseases. The company’s product portfolio consists of VERVE-101, VERVE-102, and ANGPTL3 programs.

2024 STOCK MARKET OUTLOOK

VERV, for the third quarter (ended September 30, 2024), reported collaboration revenue of $6.87 million, indicating a 120.2% growth from the prior-year quarter. Its cash and cash equivalents and total assets came in at $158.71 million and $663.91 million as of September 30, 2024.

For the fiscal year (ended December 2024), Street expects VERV’s revenue to grow by 99.4% year-over-year to $23.44 million.

VERV’s total assets have grown at a CAGR of 17.4% over the past three years. Likewise, the company’s tangible book value has increased at a CAGR of 9.7% over the past three years.

VERV shares have surged 32.9% over the past three months and 6% over the past six months to close the last trading session at $6.01.

The 12-month median price target of $25.67 indicates a 327.1% upside potential from the last closing price. The price targets range from a low of $15 to a high of $35.

VERV’s stance is apparent in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

Among the 339 stocks in the Biotech industry, it is ranked #123. Click here to see the VERV ratings (Growth, Value, Momentum, Stability, Sentiment, and Quality).

Stock #2: Immatics N.V. (IMTX - Get Rating)

Based in Tübingen, Germany, IMTX, a clinical-stage biopharmaceutical company, is focused on researching and developing potential T-cell redirecting immunotherapies for cancer treatment. It is developing targeted immunotherapies with a focus on treating solid tumors through two distinct treatment modalities. It has a market cap of $847.20 million.

In the fiscal third quarter that ended on September 30, 2024, IMTX’s revenue from collaboration agreements increased 753.2% year-over-year to €50.56 million ($52.54 million). As of September 30, 2024, IMTX’s cash reached €189.19 million ($196.62 million), with total assets amounting to €577.23 million ($599.88 million) as of September 30, 2024.

Analysts expect IMTX’s revenue for the fiscal year (ending December 2024) to grow 106.9% year-over-year to $121.27 million.

Over the past three years, IMTX’s revenue and total assets grew at CAGRs of 59.5% and 42.6%, respectively.

The stock has declined marginally intraday to close the last trading session at $6.97.

Based on Wall Street analysts offering 12-month price targets for IMTX in the last three months, the average target price is $16.58, indicating a 137.9% change from the last price.

IMTX’s POWR Ratings reflect this outlook. It has a B grade for Value and is ranked #58 out of 339 stocks in the same industry. To see the other ratings of IMTX for Growth, Value, Momentum, Stability, Sentiment, and Quality, click here.

Stock #1: Esperion Therapeutics, Inc. (ESPR - Get Rating)

ESPR is a pharmaceutical company that has a market cap of $427.57 million, and it develops and commercializes medicines for the treatment of patients with elevated low-density lipoprotein cholesterol (LDL-C). Its marketed products include NEXLETOL and NEXLIZET tablets for treating primary hyperlipidemia in adults who require additional LDL-C lowering.

On December 12, ESPR announced that it has entered into a licensing agreement with Neopharm Israel for the exclusive rights to commercialize NEXLETOL® (bempedoic acid) and NEXLIZET® (bempedoic acid and ezetimibe) in Israel.

In this agreement, ESPR will receive an upfront payment, near-term milestones, and tiered royalties. This agreement should also expand ESPR’s global reach for cardiovascular and cardiometabolic diseases.

On September 3, ESPR announced additional commercial and medicare coverage for NEXLETOL® (bempedoic acid) and NEXLIZET® (bempedoic acid and ezetimibe). This addition provides access to more than 65% of medicare lives and more than 92% of commercially insured lives, allowing the healthcare providers to prescribe it to primary and secondary prevention patients easily.

For the nine-month period that ended on September 30, 2024, ESPR’s total revenues increased 213% year-over-year to $263.20 million. Its income from operation came in at $58.82 million compared to a year-ago net loss of $113.19 million. The company’s cash and cash equivalents and total assets came in at $144.72 million and $314.11 million as of September 30, 2024.

Street expects ESPR’s revenue for the fiscal fourth quarter (ended December 2024) to increase 92.7% year-over-year to $62.14 million. In addition, it surpassed the revenue estimates in three of the trailing four quarters, which is promising.

Moreover, ESPR’s revenue has grown at CAGRs of 59.6% and 14.9% over the past three and five years, respectively. In addition, its total assets increased at 11.7% CAGR over the past three years.

Over the past three months, the stock has surged 4.8%, closing the last trading session at $2.17.

Based on Wall Street analysts offering 12-month price targets for ESPR in the last three months, the average target price is $6.86, indicating a 216.1% change from the last price, with a high forecast of $16 and a low forecast of $2.05.

ESPR’s fundamentals are reflected in its POWR Ratings. The stock has a B grade for Growth, Value, and Quality. It is ranked #42 in the Biotech industry.

Beyond what is stated above, we’ve also rated ESPR for Momentum, Stability, and Sentiment. Get all ESPR’s ratings here.

What To Do Next?

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IMTX shares were trading at $6.97 per share on Thursday afternoon, down $0.07 (-0.99%). Year-to-date, IMTX has declined -1.97%, versus a 0.58% rise in the benchmark S&P 500 index during the same period.