3 Biotech Stock Buys to Boost and Supercharge Portfolios

The biotechnology industry is flourishing due to the recent breakthroughs in drug development, technological advancements, and strong governmental backing. Given this backdrop, promising biotech stocks Organogenesis Holdings (ORGO), Theratechnologies (THTX), and Vertex Pharmaceuticals (VRTX) could be solid buys to supercharge the portfolios. Read on….

The biotech industry has exhibited resilience and versatility, particularly throughout the pandemic, thanks to its advanced innovations and relentless pursuit of mitigating the hazardous virus. Its strong position is further bolstered by a consistent demand that secures the industry’s stability in the foreseeable future.

Against this backdrop, investors might want to direct their attention to quality biotech stocks Organogenesis Holdings Inc. (ORGO), Theratechnologies Inc. (THTX), and Vertex Pharmaceuticals Incorporated (VRTX) to elevate and invigorate their portfolios.

Biotechnology, a rapidly evolving scientific sector, has already demonstrated its profound influence across various facets of daily human existence, such as public health, pharmaceuticals, food and agriculture, industry, bioenergetics, and information technology.

Indisputably, the biotech industry is one of the most pioneering and vital segments in the global economy, as evidenced during the global pandemic. The extensive array of lucrative applications further cements the industry’s resilient standing for potential growth and advancement.

Government initiatives are pivotal in fostering the industry’s sustainability, notably enhancing research and development activities. The proposed 2023 Budget earmarks $5 billion for the Advanced Research Projects Agency for Health (ARPA-H) to catalyze biomedical advancements on multitudinous scales – from the molecular to the societal – ensuring the creation of ground-breaking patient treatments.

The University of Maryland, Baltimore, received a four-year, $4 million Research Evaluation and Commercialization Hubs (REACH) grant from the National Institutes of Health (NIH), which would bolster collective efforts to foster the biomedical entrepreneurship and innovation sector in West Baltimore and the Greater Baltimore. Moreover, it could facilitate the development of one of the country’s most diverse workforces within biomedical science and entrepreneurship.

The financial injections streamline the regulatory path for medical products and standardize clinical study methodologies, accelerating new vaccines and treatment approval.

Generative AI’s incorporation into the biotech industry supports the industry, setting the stage for rapid drug discovery, efficient disease diagnosis, tailored medication plans, and sophisticated alterations in gene editing.

The global biotechnology market is expected to grow at a CAGR of 20.4% to reach $4.15 trillion by 2030. Furthermore, investors’ interest in biotech stocks is evident by the First Trust NYSE Arca Biotechnology Index Fund ETF’s (FBT) impressive 9.7% gains over the past month.

In light of these encouraging trends, let’s look at the fundamentals of the three Biotech stocks, beginning with number 3.

Stock #3: Organogenesis Holdings Inc. (ORGO)

ORGO is a regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care and surgical and sports medicine markets in the United States.

ORGO’s trailing-12-month asset turnover ratio of 0.98x is 145.7% higher than the industry average of 0.40x. Its trailing-12-month gross profit and EBITDA margins of 76.43% and 8.11% are 34.5% and 50.3% higher than the industry averages of 56.84% and 5.40%, respectively.

In the fiscal third quarter that ended September 30, 2023, ORGO’s net revenue and gross profit stood at $108.53 million and $82.74 million, respectively. The company’s income from operations rose 352.5% year-over-year to $8.05 million.

Moreover, its adjusted EBITDA increased 37.6% year-over-year to $15.97 million. For the same quarter, adjusted net income stood at $5.30 million, up 4.1% from the prior-year quarter, while net income per share stood at $0.02.

Street expects ORGO’s revenue and EPS in the fiscal year ending December 2023 to be $440.35 million and $0.04, respectively. The company surpassed consensus EPS estimates in each of the trailing four quarters, which is impressive.

The stock has gained 87.5% over the past nine months to close the last trading session at $3.75. Over the past three months, it has gained 60.3%.

ORGO’s POWR Ratings reflect its positive prospects. The stock has an overall B rating, equating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has an A grade for Value and a B for Quality. Within the Biotech industry, it is ranked #25 out of 343 stocks.

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