Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Biotechnology industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Biotechnology Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Biotechnology Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Biotechnology industry for Tuesday, October 29, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Biotechnology industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Acumen Pharmaceuticals, Inc.’s Value Grade

Value Grade:

Acumen Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops targeted therapies for the treatment of Alzheimer’s disease. The company focuses on advancing a targeted immunotherapy drug candidate sabirnetug (ACU193), a recombinant humanized immunoglobulin gamma 2 that completed Phase I clinical trial to target soluble amyloid-beta oligomers. The company has a license agreement with Lonza Sales AG to manufacture and commercialize sabirnetug; and a collaboration and license agreement with Halozyme, Inc. for the development of a subcutaneous formulation of sabirnetug. Acumen Pharmaceuticals, Inc. was incorporated in 1996 and is headquartered in Charlottesville, Virginia.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Acumen Pharmaceuticals, Inc. has a Value Score of 71, which is considered to be undervalued.

Now, let’s assess Acumen Pharmaceuticals, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 0.3, when compared to the industry median of 0.8, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Acumen Pharmaceuticals, Inc.’s shareholder yield is lower than its industry median ratio of (16.55%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Acumen Pharmaceuticals, Inc.’s price-to-book ratio is lower than its industry median ratio of 2.11. This could make Acumen Pharmaceuticals, Inc. more attractive to investors looking for a new addition to their portfolio.

Achilles Therapeutics plc’s Value Grade

Value Grade:

Achilles Therapeutics plc, a biopharmaceutical company, develops precision T cell therapies to treat solid tumors. Its platform identifies mutations formed early in the development of cancer. The company offers PELEUS, a proprietary AI-powered bioinformatics platform, used to identify clonal neoantigens in a patient. It also develops CHIRON, which is in Phase I/IIa clinical trial for use in the treatment of advanced non-small cell lung cancer; and THETIS, a product candidate in Phase I/IIa clinical trial for use in the treatment of metastatic or recurrent melanoma. The company was formerly known as Achilles TX Limited and changed its name to Achilles Therapeutics Plc in February 2021. Achilles Therapeutics Plc was founded in 2016 and is headquartered in London, the United Kingdom.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Achilles Therapeutics plc has a Value Score of 92, which is considered to be undervalued.

Achilles Therapeutics plc’s price-to-book ratio is higher than its peers. This could make Achilles Therapeutics plc less attractive for value investors when compared to the industry median at 2.11.

You can read more about Achilles Therapeutics plc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Artiva Biotherapeutics, Inc.’s Value Grade

Value Grade:

Artiva Biotherapeutics, Inc., a clinical-stage biotechnology company, focuses on developing natural killer (NK) cell-based therapies for patients suffering from autoimmune diseases and cancers. The company's lead product candidate is AB-101, an off-the-shelf NK cell therapy for patients with autoimmune diseases and cancers, such as lupus nephritis, rheumatoid arthritis, pemphigus vulgaris, the anti-neutrophil cytoplasmic antibody-associated vasculitis subtypes granulomatosis with polyangiitis/microscopic polyangiitis, systemic lupus erythematosus, and B-cell-non-Hodgkin lymphoma. It also develops AB-201, an allogeneic anti- human epidermal growth factor receptor 2 chimeric antigen receptor (CAR)-NK cell product candidate; and AB-205, an allogeneic anti-CD5 CAR-NK cell product candidate. The company was incorporated in 2019 and is headquartered in San Diego, California.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Artiva Biotherapeutics, Inc. has a Value Score of 81, which is considered to be undervalued.

Artiva Biotherapeutics, Inc.’s price-to-book ratio is higher than its peers. This could make Artiva Biotherapeutics, Inc. less attractive for value investors when compared to the industry median at 2.11.

You can read more about Artiva Biotherapeutics, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Burning Rock Biotech Limited’s Value Grade

Value Grade:

Burning Rock Biotech Limited primarily develops and sells cancer therapy selection tests in the People's Republic of China. It operates through three segments: Central Laboratory Business, In-Hospital Business, and Pharma Research and Development Services. The company primarily offers next-generation sequencing-based tissue and liquid biopsy cancer therapy selection and prognosis prediction tests for various range of cancer types, including lung cancer, gastrointestinal cancer, prostate cancer, breast cancer, lymphomas, thyroid cancer, colorectal cancer, ovarian cancer, pancreatic cancer, and bladder cancer using tissue and liquid biopsy samples. Its principal products include OncoCompass IO, a corresponding test for liquid biopsy samples; OncoScreen IO, a pan-cancer test for tissue samples; and OncoCompass Target, a ctDNA liquid biopsy-based test for NSCLC. The company also provides ColonCore for assessing microsatellite loci related to MSI status and detecting mutations in genes associated with gastrointestinal cancers; and brPROPHET, a pre-operative ctDNA detection and post-operative MRD calling for relapsed patients, as well as Magnis BR-customized version of its principal products. In addition, it offers OncoMaster, an automatic NGS data analysis and report interpretation machine for in-hospital model. Burning Rock Biotech Limited has development and commercialization agreement with Myriad Genetics, Inc. to in-license Myriad myChoice tumor testing in China; and collaborations on clinical trials and research studies with AstraZeneca, Bayer, Johnson & Johnson, CStone, BeiGene, Abbisko Therapeutics, IMPACT Therapeutics, Boehringer Ingelheim, and Merck KGaA. The company was founded in 2014 and is headquartered in Guangzhou, the People's Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Burning Rock Biotech Limited has a Value Score of 98, which is considered to be undervalued.

Burning Rock Biotech Limited’s price-to-book ratio is higher than its peers. This could make Burning Rock Biotech Limited less attractive for value investors when compared to the industry median at 2.11.

You can read more about Burning Rock Biotech Limited’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Moleculin Biotech, Inc.’s Value Grade

Value Grade:

Moleculin Biotech, Inc., a clinical stage pharmaceutical company, focuses on the development of drug candidates for the treatment of cancers and viruses. Its lead drug candidate is Annamycin, which is in Phase 1B/2 clinical trials for the treatment of relapsed or refractory acute myeloid leukemia (AML) and soft tissue sarcoma metastasized to the lungs. The company is also developing WP1066, an immune/transcription modulator designed to inhibit phosphorylated signal transducer and activator of transcription and other oncogenic transcription factors targeting brain tumors, and pancreatic and other cancers. In addition, it develops WP1220, an analog of WP1066 for the topical treatment of cutaneous T-cell lymphoma; and WP1122 to treat viruses, as well as cancer indications, including brain tumors, and pancreatic and other cancers. The company was incorporated in 2015 and is headquartered in Houston, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Moleculin Biotech, Inc. has a Value Score of 81, which is considered to be undervalued.

Moleculin Biotech, Inc.’s price-to-book ratio is higher than its peers. This could make Moleculin Biotech, Inc. less attractive for value investors when compared to the industry median at 2.11.

You can read more about Moleculin Biotech, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Synaptogenix, Inc.’s Value Grade

Value Grade:

Synaptogenix, Inc. operates as a clinical-stage biopharmaceutical company. It is conducting clinical and preclinical studies of its lead therapeutic candidate, Bryostatin-1, in Alzheimer's disease. Its preclinical studies have also demonstrated bryostatin's regenerative mechanisms of action for the rare disease Fragile X syndrome, and for other neurodegenerative disorders, such as multiple sclerosis, stroke, and traumatic brain injury. The U.S. Food and Drug Administration has granted Orphan Drug Designation to Synaptogenix for Bryostatin-1 as a treatment for Fragile X syndrome. The company was incorporated in 2012 and is headquartered in New York, New York.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Synaptogenix, Inc. has a Value Score of 61, which is considered to be undervalued.

Synaptogenix, Inc.’s price-to-book ratio is higher than its peers. This could make Synaptogenix, Inc. less attractive for value investors when compared to the industry median at 2.11.

You can read more about Synaptogenix, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

XBiotech Inc.’s Value Grade

Value Grade:

XBiotech Inc., a biopharmaceutical company, discovers, develops, and commercializes True Human monoclonal antibodies for treating various diseases. The company focuses on developing a pipeline of product candidates targeting both inflammatory and infectious diseases. It is also developing interleukin-1 alpha therapies to treat variety of medical conditions, such as cancer, stroke, heart attack, or arthritis; and mediates tissue breakdown, angiogenesis, the formation of blood clots, malaise, muscle wasting, and inflammation. The company was incorporated in 2005 and is headquartered in Austin, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

XBiotech Inc. has a Value Score of 87, which is considered to be undervalued.

XBiotech Inc.’s price-to-book ratio is higher than its peers. This could make XBiotech Inc. less attractive for value investors when compared to the industry median at 2.11.

You can read more about XBiotech Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Biotechnology Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Biotechnology stocks as well as other industrys.

Choosing Which of the 7 Best Biotechnology Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Acumen Pharmaceuticals, Inc. stock has a Value Grade of B.
• Achilles Therapeutics plc stock has a Value Grade of A.
• Artiva Biotherapeutics, Inc. stock has a Value Grade of A.
• Burning Rock Biotech Limited stock has a Value Grade of A.
• Moleculin Biotech, Inc. stock has a Value Grade of A.
• Synaptogenix, Inc. stock has a Value Grade of B.
• XBiotech Inc. stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 undervalued stocks in the Biotechnology industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Biotechnology Stocks

Want to learn more about Biotechnology stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Biotechnology Stocks for Tuesday, October 29
• 3 Undervalued Biotechnology Stocks for Monday, October 28
• 6 Undervalued Biotechnology Stocks for Friday, October 25
• 3 Undervalued Biotechnology Stocks for Thursday, October 24

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.