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2025 will be pivotal for determining the success of Viking Therapeutics’ stock.
Viking Therapeutics (VKTX -0.68%) shares rose by 2.3% by 10:20 a.m. ET on Monday, and intriguingly, this was due to an analyst’s recent evaluation.
Truist Securities analyst Joon Lee recently adjusted his price target for this unprofitable biotech firm, but why are investors reacting positively to this news?
Truist’s nuanced review of Viking Therapeutics
The reasoning is as follows: Lee has revised his price target for Viking down from $95 to $75 per share, citing “increasing competition in the obesity market” (as reported by The Fly). However, he expresses optimism that 2025 is set to be a “year of execution” for Viking as it embarks on phase 3 clinical trials for VK2735, its latest GLP-1 obesity treatment.
Successful outcomes from these trials could position Viking as a significant contender in the weight loss sector, alongside established players like Novo Nordisk and Eli Lilly.
This competition from Novo and Lilly highlights the challenging landscape. Nevertheless, even if Viking does not become a dominant force in the market, securing a portion of the extensive global GLP-1 drug market could significantly impact its financial performance.
Should investors consider Viking Therapeutics stock?
Lee’s assertion holds weight. With no current revenues or profits, merely launching any drug would represent a meaningful accomplishment for Viking, especially in the competitive arena of GLP-1 weight loss solutions.
However, this journey will not be swift; analysts from S&P Global Market Intelligence predict that Viking will generate less than $2 million in revenue this year. Yet, projections show rapid growth, with expectations of $38 million by 2027 and reaching $729 million by 2029—the first year analysts foresee Viking achieving profitability.
Nonetheless, considerable challenges lie ahead for Viking, particularly dependent on the outcomes of the phase 3 trials. As it stands, Viking remains a speculative investment. If one chooses to invest, it is advisable to proceed cautiously and maintain a diversified portfolio.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial, Novo Nordisk, and Viking Therapeutics. The Motley Fool has a disclosure policy.
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