Analysts Give Strong Buy Rating To This Undervalued Medical Stock (MURA) With Up To 350% Of Share Price Upside

Growth investors love the potential upside in stock trading and it's easy to see why. Buying a stock and watching it increase in value by several hundred or even several thousand percent is a thrill for any investor. If you like growth stocks, you might be interested in a medical stock that analysts, including the team at Raymond James, think has up to 350% upside potential.

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Mural Oncology MURA

Mural Oncology is a pharmaceutical company that develops advanced cancer treatments. It was founded in 2018 by medical professionals and entrepreneurs who wanted to explore alternatives to traditional cancer treatments like radiation therapy. Mural Oncology focuses on engineering proteins that enhance the body's ability to fight cancerous tumors.

Mural's leadership believes this is a more effective method of treating cancer that offers the added benefit of reducing the side effects of traditional treatments like radiation therapy. The company's latest innovation, nemvaleukin alfa, is designed to elevate the patient's immune and T-cells' ability to shrink tumors.

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It has already undergone a successful clinical trial, which showed promise regarding its safety and effectiveness. There is hope that nemvaleukin-based drugs will be useful in fighting various cancers, including two types of Melanoma and platinum-resistant ovarian cancer (PROC). Two nemvaleukin-based drugs are undergoing clinical trials, with results expected in Q2 2025. This is where it gets interesting.

If those tests are successful, Mural Oncology stock could be set for a massive increase. It's currently trading at only $3.99, but many analysts believe it has the potential to go much higher. Raymond James analyst Laura Prendergast recently rated MURA a "strong buy" and set a 2025 price target of $18 for MURA shares. Mura’s share price would have increased by 351% if it hits her target.

Prendergast justified her bullishness on MURA by saying, "We believe MURA is currently undervalued for the following reasons: 1) lead asset, nemvaleukin, has near-term commercial opportunity that doesn't seem to be on the radar yet for many investors, 2) management and board have notable experience that inspire confidence in the ability to maneuver late-stage drug development/commercial launch/BD execution."

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Prendergast doesn't see $18 as the ceiling for MURA either. Her analysis noted, "If MURA can execute on [its] catalysts, we anticipate the company could become a major buyout target. We analyzed recent biotech acquisitions with similar 5-year forward sales estimates to MURA. (The) average historical takeout multiple for this peer group is 5x EV/5-year forward sales, which implies a potential deal value of ~$1.2B and a $48 target price for MURA."

Buying MURA at $3.99 and having it reach $18 by the end of 2025 would be a big win. However, anyone who buys MURA at $3.99 will be thrilled if MURA shares hit $48 before a buyout in the next five years. On the other side of the equation, it's important to remember that MURA is a medical stock and its success hinges heavily on positive results from the upcoming clinical trial.

Despite early promise from previous trials, there is always an element of risk when your stock price is riding on upcoming clinical trial results. With that said, the risk is also where the upside comes from. MURA is only trading for $3.99 right now, so the risk is comparatively low compared to the upside. So, if you're looking for a growth stock, kick the tires on MURA. You might like what you see.

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