Top 3 undervalued US biotech stocks to buy before it is too late

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Oct 12, 2021
Updated: Oct 15, 2021
  • The US biotech industry seems poised for a resurgence with most stocks substantially undervalued.
  • Regeneron Pharma, Royalty Pharma and Sage Therapeutics all trade at compelling valuation multiples.
  • REGN and RPRX have plummeted in recent trading sessions, while Sage seems to be bouncing back.

With the US Q3 earnings season just getting started, there are a few biotech stocks that present an exciting opportunity for value investors. Some of these stocks look significantly undervalued after a decline in their stock prices.

Regeneron Pharmaceuticals

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) has plunged nearly 10% this month, pushing its price-earnings ratio to 9.81. As a result, the stock presents a compelling opportunity to value investors ahead of earnings next month.

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Analysts expect Regeneron earnings per share to grow by more than 65% this year, making it an exciting option for growth investors.

Source – TradingView

Technically, the stock seems to have recently plummeted to oversold conditions of the 14-day RSI after dropping below the 100-day moving average. 

As a result, Regeneron provides an exciting rebound opportunity to investors. They could target profits at $569.57, or higher at $588.78. On the other hand, if the stock continues to fall, it could find support at 4523.93, or lower at $503.11.

Royalty Pharma

Royalty Pharma Plc (NASDAQ:RPRX) shares are down more than 9% since the 14th of September. However, the stock has bounced back more than 2% over the last five trading sessions, valuing shares at a P/E ratio of about 14.57.

Analysts expect earnings to grow by more than 10% next year and at an average annual rate of 11.9% over the next five years. Therefore, RPRX looks like a competitively valued growth stock.

Source – TradingView

Technically, RPRX shares appear to be trading within a descending channel formation in the intraday chart. However, the stock has recently bounced off the trendline resistance to avoid slipping into oversold conditions.

Therefore, investors could target profits at about $37.24, or higher at $39.26, while $34.92 is a crucial support level.

Sage Therapeutics

Sage Therapeutics Inc. (NASDAQ:SAGE) shares are down more than 43% since the 11th of June. However, the stock has bounced back to surge nearly 12% since 19th August. As a result, SAGE trades at a compelling P/E ratio of just 3.80.

In addition, analysts expect SAGE earnings per share to grow by 185% and at an average annual rate of 41% over the next five years, making it an attractive option for growth investors. 

Source – TradingView

Technically, SAGE shares seem to be trading within an ascending triangle formation in the intraday chart. However, the stock is still far from reaching the overbought conditions of the 14-day RSI.

Therefore, investors could target extended gains at about $47.06, or higher at $49.80, while $42.92 and $40.32 are solid support levels.

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