Individual investors who go looking for stocks that can deliver dramatic gains in a short amount of time want to turn their attention to tech, and biotechnology. Right now, sell-side analysts are pounding the table on a pair of stocks from these industries that could make big moves in the near term.
Consensus price targets issued by the investment bank analysts who follow these stocks suggest they can rocket 42% to 67% higher in the year ahead.
Before you risk any of your hard-earned money on these stocks, it’s important to realize investment bank analysts who set attention-getting price targets have nothing to lose but their reputations if things don’t work out as expected. Here’s a closer look to see if they’re appropriate for your portfolio.
Shares of Opera Limited (OPRA 1.07%) are down about 56% from the peak they set this summer. Wall Street analysts expect it to start bouncing back soon. The average price target on the stock implies a 67% gain over the next 12 months.
Opera has been making web browsers for decades, but its share of the global browser market in October was just 3.31% or fourth place, behind Alphabet‘s Chrome, Apple‘s Safari, and Microsoft‘s Edge browser. Despite a limited share of the browser market, the business has raised revenue by more than 20% year over year for 11 straight quarters.
Opera launched Opera One, a new browser with heaps of integrated AI features, in June. It also sports an increasingly popular gaming browser, Opera GX, that added millions of users in the third quarter to reach 26.1 million at the end of September.
As this is a tech company with heaps of room to grow, you might expect Opera Limited to plow all of its profits back into growth initiatives, but it isn’t following the typical Silicon Valley playbook. Opera is headquartered in Norway and is majority-owned by a Chinese investment company that clearly favors focusing on its bottom line and returning profits to shareholders. The company initiated a semiannual dividend of $0.40 per share earlier this year, and at recent prices, the stock offers a juicy 6.5% yield.
Shares of Opera have been trading for around 15.4 times trailing free cash flow. This is a low multiple for a company growing so quickly, but investors still want to tread lightly with this stock. Earnings are on the rise now, but it’s not hard for internet users to just switch browsers if Opera starts leaning too heavily on advertising.
The past month has been a great one for Editas Medicine (EDIT 11.39%), but the stock is still down about 89% from the peak it reached in 2021. Wall Street analysts who follow the biotechnology business are expecting a comeback. The average analyst following the stock expects a 42% gain over the next 12 months.
Editas Medicine is hot on the heels of CRISPR Therapeutics with EDIT-301, an experimental gene therapy for patients with sickle cell disease or beta-thalassemia. Both companies are developing new treatments for these patients that employ CRISPR-based techniques. EDIT-301 is the only one using an enzyme called AdCas12a to edit patients’ stem cells so they’ll produce fetal hemoglobin.
Regulators in the UK have already approved exa-cel from CRISPR Therapeutics and its collaboration partner, Vertex Pharmaceuticals. The U.S. Food and Drug Administration (FDA) is expected to issue an approval decision for exa-cel on or before Dec. 8. Editas hasn’t even submitted an application for EDIT-301 yet.
Editas Medicine will share clinical trial updates from the EDIT-301 program in December, but investors should know that it’s still enrolling patients who will need more than a year of follow-up observation before we know if the candidate can join exa-cel and another competing gene therapy from bluebird bio.
Wall Street’s price targets aren’t unreasonable, but investors should understand that this is a very risky stock. At recent prices, Editas has a big $799 million market cap even though it will be at least a couple of years before the company can record any product sales.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, CRISPR Therapeutics, Editas Medicine, Microsoft, and Vertex Pharmaceuticals. The Motley Fool recommends Bluebird Bio. The Motley Fool has a disclosure policy.