1 Stock Up by 63% This Year That Could Double, According to Wall Street

Shares of Intellia Therapeutics (NASDAQ: NTLA), a small-cap biotech company, are up by 63% this year. The company is benefiting from substantial clinical progress, and judging by price targets set by Wall Street analysts, there's still plenty of upside left for the stock.

Intellia's average price target of $34.64 implies an upside of almost 100% from its current levels. Can the stock soar by that much over the next 12 months? Let's find out.

Potential catalysts on the way

Intellia Therapeutics is a gene-editing specialist that seeks to develop medicines or potential cures for rare diseases with few treatment options. The company's two leading candidates are lonvoguran ziclumeran (lonvo-z) and nexiguran ziclumeran (nex-z).

Lonvo-z

Lonvo-z is an investigational treatment for hereditary angioedema (HAE), a genetic disease that causes episodes of painful swelling in various body parts. There are ways to manage the condition, but there are no known cures. But lonvo-z could, with one treatment course, rid patients of the disease.

Image source: Getty Images.

Intellia recently initiated a phase 3 study for lonvo-z, with results expected next year. The biotech plans to submit a regulatory application for the disease in the second half of 2026. Intellia hopes to earn approval for lonvo-z by 2027, and the medicine does look promising. In an early-stage study, 10 patients treated with the therapy were free of HAE attacks with a median follow-up of two years.

Improving the standard of care in this area could make lonvo-z successful. There are an estimated 150,000 patients with HAE worldwide, and Intellia Therapeutics thinks the gene-editing therapy could generate some $5 billion in sales by 2028.

Nex-z

Intellia is collaborating with Regeneron Pharmaceuticals, a leading biotech company, to develop nex-z. This therapy targets transthyretin (ATTR) amyloidosis, a disease caused by the buildup of abnormal transthyretin proteins in the heart, which can lead to heart problems or other issues. ATTR amyloidosis can either be hereditary or acquired with age. Intellia is conducting a phase 3 study for nex-z in ATTR amyloidosis with cardiomyopathy (a condition in which the heart has difficulty pumping blood), as well as another study in hereditary ATTR amyloidosis with polyneuropathy (damage to the peripheral nerves).

Intellia Therapeutics has high hopes for nex-z, which it also plans to launch in 2027; the opportunities here could be larger than with lonvo-z. There are 50,000 patients worldwide with hereditary ATTR amyloidosis, while the number of patients with the wild type that comes with age could fall between 200,000 and 500,000. Intellia is targeting subsets of these patients with cardiomyopathy or polyneuropathy, and thinks nex-z could rack up $12 billion in sales by 2028.

Is the stock worth the risk?

Assuming Intellia Therapeutics' sales projections for its two leading candidates are correct, the stock is deeply undervalued. Here's why.

The company's market cap is currently $2 billion. Suppose, as per Wall Street's prediction, the stock doubles by this time next year; then it gains another 25% in value in the following 12 months, so that by late 2027, its market capitalization is roughly $5 billion. Since under this scenario it would generate $14 billion in sales by 2028 (25% of the profits associated with nex-z would go to Regeneron), Intellia would have a forward price-to-sales ratio of less than 0.4 -- a veritable bargain for smaller biotechs.

Frankly, Intellia Therapeutics could 10x by the end of 2027 and still be reasonably valued, provided its sales estimates for 2028 are accurate, so Wall Street might actually be undervaluing the stock. However, can we trust the biotech's sales projections?

In my view, the answer is a resounding no. It's exceedingly rare for any therapy to generate sales of this magnitude, let alone a year after approval. Furthermore, Intellia may encounter some challenges. Gene-editing medicines tend to be expensive, and it might not be easy to get third-party payers on board. That's before we consider the very real possibility that the company's late-stage programs will fail, in which case the stock will plummet.

With these caveats in mind, should investors buy Intellia Therapeutics' shares today, expecting them to double in the next year or so? The company has a lot going its way: two promising late-stage candidates, the commercial support of a biotech giant, and $630.5 million in cash as of the end of the second quarter, which it expects will last until early 2027.

However, the stock carries above-average risk. Intellia Therapeutics will soar -- possibly even eclipsing the Street's prediction in the next year -- so long as everything goes according to plan. Otherwise, investors might be left with near-worthless shares. Invest accordingly.

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