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1 'Strong Buy' Biotech Stock With 132% Upside Potential
Absci Corp (ABSI) is a biotech company that produces protein development technologies. As a data-first generative artificial intelligence (AI) drug creator, ABSI uses an integrated drug development platform that builds on traditional biological drug discovery with the help of AI to optimize multiple characteristics of the drug that may prove to be important towards development and effect of the drug.
Founded in 2011, the company operates out of Vancouver, Washington. Valued at a market cap of $408 million, the small-cap biotech is a component of the benchmark Russell 2000 Index (RUT).
ABSI stock has racked up an impressive return of 131.4% over the past 52 weeks, although the shares have pulled back more than 10% so far in 2024.
ABSI Reports Q1 Results
Absci’s most recent Q1 earnings were reported on May 14, including updates on its pipeline and generative AI platform.
The company reported revenue of $0.9 million during the quarter, down from $1.3 million a year ago, with the decrease driven by partnered and internal programs along with related progress. Research and development costs were relatively steady year over year at $12.2 million, with lower personnel costs partially offset by stock-based compensation. ABSI's net loss narrowed to $22.0 million from $23.4 million in the year-ago quarter.
Absci ended Q1 with a cash balance of $161.5 million, up from $97.7 million at the end of fiscal year 2023. Management projects to burn about $80 million in cash for the fiscal year ending Dec. 31, and predicts that its cash on hand will be sufficient to fund operations into the first half of 2027.
Looking ahead, ABSI is expecting to sign drug creation partnerships with at least four additional partners this year.
What's the Wall Street Forecast for ABSI?
Analysts have a bullish stance on biotech stock, with a consensus “Strong Buy” rating among 7 analysts in coverage. Six analysts call it a “Strong Buy,” with just one calling it a “Hold.”
Last week, Morgan Stanley (MS) joined the bandwagon, starting coverage of ABSI with an “Overweight” rating. In a note to clients, the analysts described the penny stock as “an economical way of gaining exposure to the theme of AI in biotech/drug development,” and set a price target of $7 - implying 95.5% upside potential.
In particular, Morgan Stanley mentioned that Absci’s recent partnerships with companies like AstraZeneca (AZN) and Almirall (ALM.E.DX)can “help validate Absci’s approach.”
The average 12-month price target for ABSI is even more ambitious, with the consensus forecast looking for a move up to $8.33 - about 132.6% north of current prices.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
