On Friday, Piper Sandler reaffirmed its Overweight rating on Aligos Therapeutics Inc. (NASDAQ: ALGS) stock, with a steady price target of $7.00. on the shares. The firm highlighted Aligos as an undervalued "hidden gem" stock, emphasizing the significance of its Chronic Hepatitis B (CHB) program.
The program is noted for its potential due to the lack of innovation in nucleos(t)ide analogs (NUCs) for over two decades, which has led to investor fatigue from past failures in achieving a functional cure for the disease.
The analyst from Piper Sandler pointed out that the market may be overlooking Aligos' novel mechanism of action (MoA), which provides a clear regulatory pathway for chronic suppression treatment. This is seen as an advantage that could allow Aligos to compete effectively with NUCs as a first-line (1L) therapy. The firm's confidence in the stock is further supported by the company's pipeline, which includes a promising candidate for Non-Alcoholic Steatohepatitis (NASH), ALG-055009.
ALG-055009, which belongs to the THR-β class, is set apart from its competitors, according to the firm. Piper Sandler anticipates the Phase 2 HERALD trial results, expected in the fourth quarter of 2024, to be a significant event for Aligos. Additionally, the approval of REZDIFFRA, the first THR-β to be approved, is seen as a development that could favorably impact Aligos' position in the NASH market and potentially drive the company's share value higher.
In summary, Piper Sandler's reiteration of the Overweight rating and price target for Aligos Therapeutics underscores the firm's view of the stock as significantly undervalued. The CHB and NASH programs are identified as key drivers that could unlock value for investors, with forthcoming trial results and market developments serving as potential catalysts for the stock.
InvestingPro Insights
As Piper Sandler reaffirms its confidence in Aligos Therapeutics (NASDAQ: ALGS), the financial metrics from InvestingPro provide a nuanced perspective on the company's current financial health. With a market capitalization of $51.16 million, Aligos presents itself as a smaller biotech firm with the agility to navigate the competitive landscape. Notably, the company holds more cash than debt, suggesting a level of financial stability that could support its ongoing research and development efforts. However, the InvestingPro data indicates a negative P/E ratio of -0.52 for the last twelve months as of Q1 2024, reflecting the company's current lack of profitability.
Moreover, the stock's performance metrics reveal challenges, with a 1-week price total return of -10.31% and a 1-month price total return of -16.77%, indicating recent market skepticism. Despite this, InvestingPro Tips highlight that 2 analysts have revised their earnings upwards for the upcoming period and that the stock's RSI suggests it is in oversold territory, potentially signaling a buying opportunity for contrarian investors.
For investors seeking a deeper dive into Aligos Therapeutics' prospects, InvestingPro offers additional insights, including 10 more InvestingPro Tips that can be accessed at InvestingPro. To enhance your investment research on Aligos or other stocks of interest, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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