2 Under-the-Radar Stocks to Buy and Hold

Popular companies aren't always great investments, and little-known corporations sometimes are. Those in the latter group may even be underpriced, given that they receive less attention and analyst coverage than their larger, more prominent peers, creating attractive opportunities for investors.

Let's consider two under-the-radar stocks that are worth serious consideration for long-term investors: Axsome Therapeutics (NASDAQ: AXSM) and Madrigal Pharmaceuticals (NASDAQ: MDGL).

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1. Axsome Therapeutics

Axsome Therapeutics's stock has more than doubled in value over the past five years. The company owes that growth to solid clinical and commercial progress with its leading candidates, including Auvelity, which is approved to treat depression. Even after its solid run, Axsome's new approvals and label expansions over the next five years could allow it to improve its financial performance significantly and even turn a profit.

It is already improving. In 2025, Axsome's revenue increased by 66% to $638.5 million, while its net loss per share of $3.68 was much better than the loss per share of $5.99 reported in 2024.

Axsome Therapeutics is going after large, underserved markets where some of its products could generate well over $1 billion in sales. For instance, the company has requested approval for Auvelity in Alzheimer's disease (AD) agitation, an indication where the biotech sector analysts estimate its peak sales could reach $1.5 billion to $3 billion.

If that seems too optimistic, consider that there's only one medicine approved for AD agitation in the U.S., even though the majority of the more than 7 million AD patients in the U.S. experience it. Axsome's projections for Auvelity in AD agitation appear reasonable, and across all products and indications in its late-stage pipeline, the company estimates it could reach peak sales above $16 billion.

Axsome Therapeutics' pipeline makes a strong case for the stock.

2. Madrigal Pharmaceuticals

In 2024, Madrigal Pharmaceuticals received approval from the U.S. Food and Drug Administration (FDA) for Rezdiffra, the first medicine indicated for the treatment of metabolic dysfunction-associated steatohepatitis (MASH). Its commercial progress has been strong ever since. Last year, with Rezdiffra as its only product on the market, the company generated $958.4 million in revenue, compared to $180.1 million in 2024.

That's all the more surprising considering the therapy is under accelerated approval, meaning it will have to show effectiveness in confirmatory trials or be taken off the market. The strong prescribing trends for Rezdiffra so far suggest that physicians are confident it's at least somewhat effective -- otherwise, even with FDA approval, they would be less likely to prescribe it.

Rezdiffra's trajectory to date also underscores the significant unmet need in MASH, an area that several pharmaceutical leaders are trying to break into. According to some estimates, about 22 million adults in the U.S. have MASH, while about 9 million of them have clinically meaningful liver disease as a result. So far, Madrigal has treated about 36,250 patients; that number is only 17% of the company's target of 315,000 patients who are seeing specialists.

Besides Rezdiffra, Madrigal has over 10 programs in its MASH pipeline. It will likely seek to target patients even beyond the 315,000 it initially set its eyes on. Madrigal Pharmaceuticals could ride this market for years, delivering strong financial results and competitive returns.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axsome Therapeutics. The Motley Fool has a disclosure policy.