Many may be puzzled as to why we are taking opposing positions on Ford (NYSE:F) and Tesla (NASDAQ:TSLA); However, there is a significant disparity between the majority of automakers and Tesla due to the lifecycle of the industry and how investors value the respective stocks.

This article covers Tesla’s outlook given a surge in commodity prices. There has been a contentious debate where some have taken a stand and asserted that rising metal prices will increase variable costs and lead to less growth, while others argue that rising fossil fuel prices will trigger a buying spree for electric vehicles. This article takes a bird’s nest view and dissects both sides of the argument structurally and in reduced form.

Recent growth

Efficiency

I was quite surprised when I came across these measurements. I’ve analyzed the business segments of a few large companies over the course of my career, and we typically look at segment revenue and cash flow relative to CapEx while considering the level of CapEx relative to the past. I will, however, talk about Tesla’s company-wide metrics.

Tesla’s CapEx, which is its internal reinvestment rate, increased by 14.97x year-over-year as production ramps up, expansion into Texas with headquarters, factory expansion in Germany, and Chinese market penetration .

That being said, Tesla’s cash flow to CapEx has increased 3.4x over the past year, its Capex to revenue has improved by 62.80% and its operating margins improved 2.1 times. Keep in mind this was during a time of rising input costs.

Expansion

It is also clear that Tesla management anticipated an increase in demand with an increase in finished products. You typically want to look at the entire pipeline of raw materials, work in progress, and finished goods and look for alignment when determining demand. It’s obviously an internal way of looking at things, but it gives substance.

Finally, for this section, I would like to provide an overview of business expansion in China. Although Tesla’s sales in China fell by 5.6% month-over-month for February, it still produced 200% year-over-year growth, suggesting it is entering a robust consumer market with a vengeance. It is critical for a business to grow globally when it is susceptible to sales volatility; in effect, it allows it to no longer rely on the health of a single geographic consumer base and, in turn, to reduce the risks associated with the outlook for its stock. I see huge benefits for Tesla’s expansion into an economy with a huge GDP to say the least.

Commodity Price Analysis

Much has been made of the commodity price spike and its impact on Tesla shares. While this will impact the company’s variable cost, I don’t think it will have a massive impact on its share price.

Historically speaking, Tesla investors didn’t hesitate much when metal and mineral prices rose, in fact there was a positive correlation.

Why could this be? Well, the stock market is looking forward and probably separating Tesla’s hypergrowth model from transient/highly elastic inflation. Don’t get me wrong, I think rising metal prices will have a massive impact on many auto stocks, but Tesla’s “best in class” status could prevent it from being correlated with other auto stocks. .

Additionally, Tesla’s status is still that of a Veblen product that serves a niche market, allowing its sales to be less susceptible to negative macroeconomic factors than more traditional automakers. Many analysts have argued that rising fossil fuel prices are a reason consumers are turning to electric vehicles. I think this is invalid because I don’t see how the masses would refinance a new vehicle when they are already financially stressed in the first place. Moreover, non-core inflation is more elastic than core inflation; most people who can finance vehicles have enough life experience to know that energy prices will trade in equilibrium over the lifetime of their car ownership (assuming they don’t change in any way maniacal). Thus, I see Tesla as a trend rather than its efficiency contributing to mass purchases; otherwise, we would have also seen the previous electric vehicles selling like hotcakes?

To wrap up this section, I’d like to touch on a few macro factors. First, the commodity price spikes ex-post and in their current form have been mostly driven by push factors. I believe there was a massive overreaction during Covid-19 and subsequently with the Russian-Ukrainian conflict. I’m not saying in a linear way that commodity prices won’t be high for the foreseeable future, however, commodity prices tend to top in the short term and stay down in the long term, and that Won’t surprise me if traders soon overreact on the downside.

Let’s look at purchasing power and reopenings to provide a potential trade-off scenario.

First, consumer purchasing power has declined significantly over the past year, suggesting that we are likely to experience lower demand for industrial and precious metals in the near term, as they are directly tied to general consumption expenditure. To contextualize, you will only produce items at a rate that you expect consumers to buy, unless you are in a niche market like Tesla.

Second, we are seeing less stringent Covid policies. Reopenings will likely increase capacity for metal producers, which will likely contribute to price headwinds.

So, to sum up, I’m not implying that commodity prices will be cheap (relative to break-even point) over the next few years; however, I would argue that current price levels are overblown, and it’s clear that Tesla’s stock is forward-looking, meaning it’s unlikely to be as sensitive to transient commodity costs as it is. other industrial/consumer discretionary goods.

Evaluation

Many look to Tesla’s price/earnings ratio and its other price multiples to conclude that Tesla is overvalued, but that’s too simplistic a way to go about it. First, let’s justify the company’s PE.

Source: Alpha Research

Yes, Tesla’s PE ratio is outrageous, but if we look at its PE versus earnings growth, it’s actually still an undervalued metric. The PEG ratio has a value threshold of 1.00 and, in the case of Tesla, suggests that its earnings growth is currently outpacing its stock growth by about 3.85 times, leaving investors plenty of room to maneuver. to capture value.

The second argument is for an asset-based valuation, which gives us a fair value of $863.25. That in itself suggests the stock is undervalued based on past results, let alone future growth. If you see a stock trading at its current net asset value, you know it is valued by the market and trading rationally; however, Tesla is undervalued.

Enterprise Value (EV)	$880.34 billion
Cash (NYSE:C)	$17.71 billion
Market value of debt (NYSE:D)	$8.90B
Outstanding shares (NYSE: N/A)	1.03 million
The formula	(EV – D + C)/SO

Source: Alpha Research

Risks Explained

Although I have argued that rising commodity prices will not have a massive effect on Tesla stock, there is still a need to discuss the risks associated with it. I’m going to skip the obvious of rising variable costs, and I’m going to address hedging activities. To our knowledge, Tesla is not hedged against commodity prices, and that’s a bit of a rookie mistake; as a manufacturer, you would always want to hedge against input costs. I don’t know if Tesla has initiated any hedges since publishing its 10-K report in February. However, failure to do so could harm the effectiveness of the company’s financial management.

Also, from a stock perspective, Tesla has a worse Sharpe ratio than last year. The Sharpe ratio is a function of expected return relative to overall market volatility.

Why should this matter? Because you are essentially invested in a risky asset that does not justify the returns as well as in the past, therefore switching to an investment with more positively biased returns could be a valid option.

Last word

Tesla shares have a history of fending off rising input costs. The company has produced robust growth efficiently over the past year, which has also driven prices higher. Its expansion into China bodes well, given that it is less dependent on a single economy. The stock is also still undervalued, contrary to popular opinion.

We remain bullish on Tesla despite rising input costs.

Pintec Technology Holdings Ltd – ADR (NASDAQ: PT) stock price soared 53.3% today despite a lack of announcements from the Chinese fintech that serves enterprise clients.

Shares of the company had been under a wave of buying pressure since yesterday, when it closed up 13.6%. Although the exact driver of the rally is unclear, the recent rally could significantly benefit the company if it persists.

Also read: The best financial stocks to buy right now.

Pintec Technology provides financing solutions to other businesses in the area of ​​SME Loans, Business Loans, Installment Loans and Personal Loans. The Company also provides services such as operating Financial RPA Centers of Excellence on behalf of clients.

The fintech company also offers robo-advisory services to more than 70 funds. The services are based on Renminbi-denominated assets while offering over 4,000 services to over 290,000 retail clients who have processed transactions worth over 8.4 billion Renminbi.

The above are just a few of the services offered by Pintec Technology Holdings, indicating that the company has significant long-term potential given the uncertain business environment created by the COVID-19 pandemic.

Pintec also operates a fund supermarket, a trading system for public fund products. Therefore, recent investor interest in the company may be warranted given the strong product line it offers in its home market.

More than 7.32 million PT shares had changed hands at the time of writing as investors bought the shares of the Chinese fintech company, and I wouldn’t blame them.

PT shares look quite attractive at current prices, given that they have a market capitalization of 420.68 million based on Wednesday’s closing price. The recent rally also means that the company’s shares could easily break above the $1 mark.

Shares of Pintec Technology last traded above the $1 mark on January 23-24, 2022 before falling back, and its current price does not meet Nasdaq listing requirements.

Investors are hoping the recent rally will push PT shares back above the $1 mark. Meanwhile, those looking to buy the shares should know that they traded as low as $15 in the past on the day they listed on Nasdaq on October 25, 2018.

*This is not investment advice. Always exercise due diligence before making investment decisions.

Pintec Technology share price.

Pintec Technology’s stock price climbed 53.32% to trade at $0.7318, up from Wednesday’s closing price of $0.4773.

Spotify (NYSE: SPOT) stock broke 3.46% of its value today and briefly hit a 52-week low of $134.09 per share. Now many are speculating about SPOT’s short-term trajectory and long-term outlook.

At market close today, Spotify stock was worth $135.17 per share, having rebounded from the aforementioned 52-week low of $134.09 per share that occurred earlier in the afternoon. SPOT’s end-of-day value reflects a 10.86% drop from Monday morning, when the shares were trading around $152 each, as well as a more than 50% drop from the start of March 2021, when the shares were hovering around $275 each.

Additionally, Spotify’s current stock value is the lowest since the onset of the COVID-19 pandemic in March 2020, when SPOT fell into the low $120s. (The title then rebounded slightly in April 2020 and, following the May 2020 announcement that Spotify would become the exclusive home of The Joe Rogan Experienceembarked on an ascent that culminated in a price of nearly $365 per share in February 2021.)

As for possible reasons for Spotify’s stock pullback – and SPOT’s way forward – Russia’s invasion of Ukraine, inflation and related concerns “will continue to dominate markets over the week. to come,” according to finance professionals. The S&P 500 fell 1.3% this week, while the NASDAQ lost 2.8%.

It’s possible that the conflict in Ukraine is also contributing to SPOT’s woes due to its impact, especially on Spotify’s operations. Spotify rolled out to Russia (along with 12 other European countries) in July 2020, and Q3 2020 highs said the launches had “unlocked significant pent-up demand… with Russia being the biggest upside driver “.

Markets including Russia made “significant contributions” to total monthly active users (MAUs), Spotify revealed in Q1 2021, and executives in Q3 2021 acknowledged their partnership “with the largest all-digital bank of Russia” to offer fans three-month free trials.

But as Spotify closed its office in Russia and kicked state media out of the platform, it remains to be seen whether domestic subscription targets will materialize in the first quarter of 2022. Additionally, the Russian government has blocked today access to Twitter and Facebook nationwide.

The points are significant as Spotify in Q4 2021 forecast 418 million MAUs and 183 million subscribers for the following quarter – the latter total representing an increase of just three million. Of course, Russia and its more than 144 million people factored in that modest subscriber estimate, which seemed to sway many investors to sell SPOT.

Granted, Spotify stock was worth over $200 per share in early February, and SPOT suffered a double-digit decline immediately following the release of the Q4 2021 earnings report. Nonetheless, it should be noted in conclusion that several investors are extremely optimistic about SPOT’s long-term potential.

And today, investment firm The Benchmark Company set a target value for Spotify stock at $260 per share, estimating that “the current share price implies only 250 million premium customers in 2030”.

Comcast Corporation (NASDAQ:CMCS.A) has received a lot of attention due to a substantial price movement on the NASDAQGS over the past few months, rising to US$53.73 at one point and falling to a low of US$45.13. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to answer is does Comcast’s current stock price of $47.07 reflect the true value of the large cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at Comcast’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Comcast

What is the opportunity at Comcast?

According to my multiple price model, which compares the company’s price-earnings ratio to the industry average, the stock price seems justified. I used the price/earnings ratio in this case because there is not enough visibility to predict its cash flow. The stock’s ratio of 15.07x is currently trading slightly above its industry peers’ ratio of 14.66x, which means that if you buy Comcast today, you’ll pay a relatively reasonable price for it. . And if you think Comcast should be trading within this range, then there’s not much room for the stock price to rise above the levels of other industry peers over the long term. On the other hand, Comcast’s stock price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean that the stock is less likely to fall due to natural market volatility, suggesting fewer buying opportunities in the future.

Can we expect growth from Comcast?

Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Comcast’s earnings over the next few years are expected to increase by 25%, indicating a very optimistic future. This should lead to more robust cash flow, fueling higher share value.

What does this mean to you :

Are you a shareholder? CMCS.A’s bullish future growth appears to have been factored into the current share price, with stocks trading around industry price multiples. However, there are also other important factors that we have not considered today, such as the financial strength of the company. Have these factors changed since the last time you consulted CMCS.A? Will you have enough conviction to buy if the price moves below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on CMCS.A, now might not be the most optimal time to buy, given that it’s trading around industry price multiples. However, the optimistic outlook is encouraging for CMCS.A, which means that it is worth looking further into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So, if you want to dig deeper into this stock, it is crucial to consider the risks it faces. At Simply Wall St, we found 1 warning sign for Comcast and we think they deserve your attention.

If you’re no longer interested in Comcast, you can use our free platform to see our list of over 50 other stocks with high growth potential.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Time for a raid.

The Russian invasion of Ukraine has caused turmoil on the ground and in financial markets. This triggered a sell-off in global equity markets. Prices for oil and natural gas and other commodities such as wheat, as well as gold, palladium and other precious metals jumped as investors feared supply disruptions.

They piled into gold, European and US government bonds, which are seen as safer investments in times of trouble. Russian assets sold off, from the ruble to stocks and bonds.

UK and European stock indices fell between 3% (FTSE 100 index) and 5% (German stock market).

Crude Brentthe global oil benchmark, rose above $105 a barrel for the first time since August 2014. It now stands at $104.50 a barrel, up almost 8%.

British gas for next day delivery jumped 40% to £280 per therm.

European wheat futures jumped 20% to a record price of €344 a tonne, the biggest rise in nine years. Ukraine is the fifth largest wheat exporter in the world and considered the breadbasket of Europe. This does not bode well for consumers – food and energy prices are already high.

Gold and the prices of other precious metals, including palladium, platinum and nickel, have surged. Spot gold gained more than 3% today to $1,969 an ounce. Aluminum reached a record of $3,443 per ton in London.

The Russian Ruble hit a record low of 80.60 to the dollar, but then recovered somewhat to 83.4, still down 2.7% on the day, after the Bank of Russia said it would intervene to strengthen the currency. The ruble is trading at 93.7 per euro, down 2.2%.

Russian stocks fell 50% when trading resumed on the Moscow Stock Exchange. The dollar-denominated RTS index fell 49.93% in early trading and then traded down 34%. The ruble-denominated Moex index fell 45% to 1,690.13, then 31%.

Listed in London Russian companies suffered sharp drops in share price, with Sberbank plunging 61% and Gazprom losing 28%.

As Russian public debt liquidated, yields on benchmark 10-year OFZ ruble bonds (which move inversely to prices) hit 10.93%, the highest since early 2016.

Shares of Huntsman Corp (HUN) closed today 0.7% below their 52-week high of $41.50, giving the company a market capitalization of $8 billion. The stock is currently up 17.7% year-to-date, 47.3% over the past 12 months and 119.3% over the past five years. This week, the Dow Jones Industrial Average fell 2.5% and the S&P 500 2.7%.

Commercial activity

• Trading volume this week was 67.5% above the 20-day average.
• The beta, a measure of the stock’s volatility relative to the broader market, is 1.0.

Technical indicators

• The stock’s Relative Strength Index (RSI) was above 70, indicating that it may be overbought.
• The MACD, a momentum indicator that follows the trend, indicates an upward trend.
• The stock closed below its Bollinger Band, indicating it may be oversold.
• The stock closed 3.1% higher than its 5-day moving average, 11.3% higher than its 20-day moving average and 20.0% higher than its 90-day moving average.

Comparative market performance

• The company’s stock price is the same as the S&P 500 index, beats it on a 1-year basis and beats it on a 5-year basis
• The company’s stock price is the same as the Dow Jones Industrial Average, beats it on a 1-year basis and beats it on a 5-year basis
• The company’s share price is the same as the performance of its peers in the materials industry sector, beats it on a 1-year basis and beats it on a 5-year basis

Comparative performance by group

• The company’s year-to-date stock price performance beats the peer average by -833.0%
• The company’s stock price performance over the past 12 months outperforms the peer average by 497.6%
• The company’s price-to-earnings ratio, which relates a company’s stock price to its earnings per share, is -64.2% below average.

This story was produced by the Kwhen automated news generator. For more articles like this, please visit us at finance.kwhen.com. Write to [email protected]. © 2020 Kwhen Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bench-Corp. (ASB) today closed 0.9% below its 52-week high at $25.78, giving the company a market capitalization of $3 billion. The stock is currently up 12.6% year-to-date, 38.8% over the past 12 months and 11.8% over the past five years. This week, the Dow Jones Industrial Average fell 1.2% and the S&P 500 1.1%.

Commercial activity

• Trading volume this week was 29.1% below the 20-day average.
• The beta, a measure of the stock’s volatility relative to the broader market, is 0.9.

Technical indicators

• The stock’s relative strength index (RSI) was between 30 and 70.
• The MACD, a momentum indicator that follows the trend, indicates an upward trend.
• The stock closed below its Bollinger Band, indicating it may be oversold.

Comparative market performance

• The company’s stock price is the same as the S&P 500 index, beats it on a 1-year basis and lags it on a 5-year basis
• The company’s stock price is the same as the Dow Jones Industrial Average, beats it on a 1-year basis and lags it on a 5-year basis
• The company’s share price is the same as the performance of its peers in the financial industry sector, beating it on a 1-year basis and lagging it on a 5-year basis

Comparative performance by group

• Year-to-date, the company’s stock price performance outperforms the peer average by 67.7%
• The company’s stock price performance over the past 12 months exceeds the peer average by 6.5%
• The company’s price-to-earnings ratio, which relates a company’s stock price to its earnings per share, is -57.3% below average.

This story was produced by the Kwhen automated news generator. For more articles like this, please visit us at finance.kwhen.com. Write to [email protected]. © 2020 Kwhen Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Shares of Avis Budget Group Inc. plunged on Tuesday after the car rental company reported upbeat fourth-quarter results, but investors instead focused on disappointing daily revenue and fleet metrics. rental.

the production car,
-11.47%
fell 11.6% in midday trading, on volume that was already nearly triple the full-day average. That put the stock on track for the biggest one-day selloff since it fell 14.8% on Nov. 9.

Buy cheap? Even on the stock exchange, buyers like to find a bargain. Defining a good deal, however, can be tricky. There is a stigma attached to low stock prices, based on the fact that most stocks don’t fall for no reason. And those reasons are usually rooted in some facet of poor business performance.

But not always, and that’s why it can be difficult to find good deals. There are many low-priced stocks with strong fundamentals and solid future prospects, and these options allow investors to “buy low and sell high”. These are the stocks that Warren Buffett had in mind when he said, “Whether it’s socks or stocks, I like to buy quality goods when they’re marked down.

Using the TipRanks database, we’ve identified three stocks that have both low prices right now and strong upside potential for the year ahead. Not to mention, each gets a consensus “Strong Buy” rating from the analyst community. Let’s dive in and find out what drives this perspective.

MYT Netherlands (MYTE)

We will start with a European holding company, MYT Netherlands, whose subsidiary Mytheresa is an e-commerce leader based in Germany. The online store offers a wide range of ready-to-wear products, for women, men and children, as well as shoes and accessories. Mytheresa focuses on luxury goods, and shoppers can find top brands like Gucci, Veneta, Burberry, Dolce & Gabbana…the list goes on. MYTE went public in New York in January last year, and in its first fiscal year as a public company, 2021, recorded more than 612 million euros ($694 million) in total net sales. .

In its first four publicly disclosed quarters, Mytheresa’s revenue remained in a narrow range, between $186 million and $198 million. Earnings were more volatile, ranging from 6 cents to 24 cents per share. The most recent figure, 11 cents per share in the first quarter of fiscal 2022, was up 10% sequentially, and a sharp turnaround from the year-ago quarter’s net loss of 10 cents.

Despite these gains, MYTE shares are down 54% in the past 12 months. On the Societe Generale cover, analyst Abhinav Sinha explains why he sees this drop as an opportunity for investors: high growth prospects, strong margins and a solid balance sheet. In this context, we believe that the current share price is attractive.

The analyst sees the company able to maintain “decent and sustained profitability”, writing: “We expect a stable medium-term EBITDA margin at around 9% (2022-24e) supported by the following: 1) MYT’s custodial-focused custodial proposition, with its strong track record of pricing discipline reducing the risk of gross margin declines (the key indicator for judging a 1P business); 2) Mytheresa’s relative immunity to current supply chain disruptions, as stand-alone shipping/transportation costs are only 5-6% of sales, thus protecting EBIT margin from current cost escalation transportation, and the majority of MYT’s supply comes from Europe (close to its logistics hub in Germany).

In line with his bullish approach, Sinha gives MYTE shares a Buy rating and his price target of $15 suggests an impressive 75% upside potential for the coming year.

Wall Street is generally bullish here, as shown by the Strong Buy consensus rating, based on a 3-to-1 edge of buys over bookings. The stock is selling for $14.26 and its average target of $32.25 implies a 126% upside over 12 months. (See MYTE stock forecast on TipRanks)

Black Knight (BKI)

Next up is a tech company, Black Knight. This company provides data and analytics solutions and software for the real estate and mortgage finance industries. Black Knight is headquartered in Jacksonville, Florida, a fast growing city in one of the fastest growing states in the country. The company’s software and data solutions automate mortgage lifecycle processes, including loan origination, ongoing service and default if necessary. Black Knight empowers its clients to effectively manage risk and improve their financial performance.

Rising house prices have been good for business. Black Knight recently reported on the magnitude of the increase, noting that rising real estate values ​​during 2021 have given owners a 35% increase in “workable equity”, the amount available to be used as liquid assets. . This translates to a $2.6 trillion increase in overall real estate values, a jump driven by home sales.

A look at Black Knight’s own earnings over the past two years confirms the impact of rising home values ​​on mortgage managers and facilitators. The company has had six consecutive quarters of sequential revenue gains, and the most recent report, 3Q21, showed $378 million in revenue, up 21% year over year. EPS came in at 60 cents, for a 15% year-over-year gain.

Despite those gains, BKI shares are down 20% since hitting a high last December. Oppenheimer analyst Dominick Gabriele sees the stock’s heightened volatility as symptomatic of an upcoming housing market downturn, but doesn’t necessarily see it as a reason to drop the stock.

“We think the relative sell-off in BKI stock versus NASDAQ likely represents more than headwind to the current Fannie, Freddie, and MBA creation forecast… BKI’s ability to sell new platforms, to sell in a to leverage/maintain its dominant registered account market share while targeting M&A offers investors a more stable and unique way to play in the mortgage industry through less cyclical technology revenue underwriting. Given accelerating revenue growth, increased LT margin and market positioning combined with a valuation discount to historical norms, we believe today represents an opportunity to one-time purchase for investors,” explained Gabriele.

To that end, Gabriele gives BKI an outperform (i.e., buy) rating, and his price target of $93 implies roughly 40% year-over-year upside potential. (To see Gabriele’s track record, Click here)

Overall, this stock has received 4 recent stock ratings and they include 3 Buys to 1 Hold, for a Strong Buy consensus rating. The average price target of $82 indicates room for growth of 23% from the current trading price of $66.60. (See BKI stock forecast on TipRanks)

Cue Biopharma (SIGNAL)

Last but not least, Cue Biopharma, a clinical-stage company working on new treatments in the field of immunotherapy, specifically a new class of injectable biologic drugs that will directly engage and modulate selected T cells. This approach has applications in multiple fields, including cancer treatment, infectious diseases and autoimmune diseases. Cue uses two proprietary biological platforms, Immuno-STAT and Neo-STAT to develop its pipeline drug candidates. CUE shares peaked in November and since then the stock has fallen 65%.

Even though the stock fell, the company showed progress in its research program. Most of the company’s pipeline is still in preclinical development, but the cancer treatment research track includes two drug candidates that are ready for release. One, CUE-101, is in a Phase 1 clinical trial for the treatment of squamous cell carcinoma of the head and neck; the other, CUE-102, has recently passed significant development milestones.

In a Jan. 5 announcement, Cue said CUE-102 has shown potential in preclinical studies for activity against Wilms tumor 1 (WT1)-specific cytotoxic CD8+ T cells. This makes it a strong candidate for clinical trials in the treatment of WT1-expressing cancers. Cue is developing this candidate in partnership with LG Chem Life Sciences and will now receive a milestone payment of $3 million, under the terms of its agreement with LG Chem. A filing for an experimental new drug is scheduled for 1Q22.

On the company’s human clinical trial of CUE-101, Cue announced in late January that the drug, in combination with Keytruda, had shown progress in four patients on dose escalation. Two showed partial objective responses, while two showed overt reductions in target lesions.

Cue is covered by Craig-Hallum analyst Robin Garner, who is impressed with the early clinical results and potential of CUE-101. He writes, “We believe that CUE is undervalued at the current price based on CUE-101 monotherapy and doubling the efficacy of SOC in difficult-to-treat HNSCC…There is evidence of reduction growth in target lesions in the four front-line patients in the dose-escalation of the combined study… CUE-101 represents an emerging solution to improve therapeutic benefit and expand patient access to checkpoint inhibitors.

Consistent with those comments, Garner assigns CUE stock a Buy rating and a price target of $28, indicating confidence in a 345% year-over-year upside. (To see Garner’s track record, Click here)

Overall, this stock enjoys a unanimous Strong Buy consensus from the street, based on 6 positive stock ratings. The stock is currently selling at $6.29 and its average target of $27.67 suggests it has a decidedly robust upside of 340% behind the scenes for 2022. (See CUE stock forecast on TipRanks)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Warning: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.