5 Best Biotech Stocks to Buy in September 2021

The healthcare industry has been in focus over the last year amid the COVID-19 pandemic. Meanwhile, the sector has been under pressure of late as the Biden administration plans to regulate drug prices.

Biotech stocks can be a good asset class within equities and a good way to play the healthcare sector. Here are the five best biotech stocks that you can buy in September 2021.

1. Crispr Therapeutics (NYSE: CRSP)

Crispr Therapeutics is a Switzerland-based biotech company focusing on genomics. Cathie Wood of ARK ETF is also bullish on the stock and has been buying the stock. Wood sees genomics and digital wallets as an exciting investment theme. “DNA sequencing is going to introduce science into healthcare decision making for the first time,” said Wood earlier this year. She added, “We can honestly say that until now more than half of all healthcare decisions were in some part made through guesses or experiences. Now we’re going to have the data.”

CRSP is a popular biotech stock on WallStreetBets also

CRSP stock was previously also popular on Reddit group WallStreetBets. The stock has lost 29% so far in 2021 but consensus estimates call for an upside of 47% over the next 12 months. Of the nine analysts polled by TipRanks, seven rate CRSP stock as a buy while the remaining two have a hold rating.

All said CRSP stock is a good biotech stock to buy and play the genomic industry. The industry’s long-term forecast looks positive and the recent dip in CRSP stock looks like a good buying opportunity.

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2. Vertex Pharmaceuticals (NYSE: VRTX)

Vertex Pharmaceuticals stock is another good biotech stock to buy in September. The stock is down 21% so far in the year and trades near the 52-week lows. However, the dip looks like a good opportunity to buy this beaten-down biotech stock at attractive valuations. The stock now trades at an NTM (next-12 months) PE multiple of only about 14.5x which is at a steep discount to its long-term multiples.

Vertex looks like a reasonably valued biotech stock

Analysts expect Vertex to report revenue growth of 18.2% in 2021 and 9.5% in 2022. Its EBITDA is expected to rise 18.2% and 9.5% over the period. Jim Cramer, the host of the Mad Money show on CNBC is also bullish on VRTX stock and sees the fall in the stock as a buying opportunity.

Of the 27 analysts covering VRTX stock, 20 rate it as a buy or some equivalent. Five analysts rate it as a hold while the remaining two analyst rate it as a sell. Its median target price of $260 implies an upside of 43.2% over current prices. The stock’s highest target price of $331 is a premium of 82.3% over current prices. Earlier this month, Stifel Nicholas had downgraded the stock from a buy to hold and lowered the target price from $244 to $213.

All said, at current prices, the risk-reward ratio for VRTX stock seems attractive and it looks like a good biotech stock to buy.

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3. Moderna (NYSE: MRNA)

With a year-to-date gain of 255%, Moderna is among the best performing biotech stocks. Meanwhile, valuing MRNA stock has been a conundrum. The stock trades at an NTM PE of only 8.7x. Now, that might appear way too low. However, here we need to consider that the company’s earnings have spiked due to the demand for COVID-19 vaccines.

Moderna is a good biotech stock to play COVID-19 vaccines

Analysts expect Moderna’s revenues to rise 2,430% to $20.3 billion in 2021. However, next year, the revenues are expected to grow only 1.5% to $20.6 billion. While we don’t have credible estimates beyond that, the fact remains that as the demand for the COVID-19 vaccine wanes, the revenue growth for Moderna might fall drastically.

Wall Street is divided on the biotech stock’s outlook though. Bank of America analyst Geoff Meacham is very bearish on the stock and terms the current valuations as “ridiculous.” However, some others disagree. Stephen Weiss, chief investment officer at Short Hills Capital Partners believes that Moderna is a long-term play and would benefit from the booster shots.

Moderna stock forecast

The company has also filed for a full FDA authorization which would help buoy sentiments further. Of the 16 analysts covering Moderna, only five have rated it as a buy while seven rate it as a hold. The remaining four analysts have a sell rating on Moderna stock. Its median target price of $453 is a premium of 15.1% over current prices. The stock’s street-high target price of $485 is a premium of 23.3%.

Overall, given the need for booster doses, Moderna could be a good biotech stock to buy. The stock has come off its recent highs and the dip looks a good buying opportunity.

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4. AbbVie (NYSE: ABBV)

AbbVie stock is up only about 2% for the year and has come off its 52-week highs. However, it looks like a good biotech stock to buy, especially for those investors who are looking at a high dividend-paying stock. ABBV has a dividend yield of 4.8% which is over thrice that of the S&P 500’s dividend yield.

AbbVie is a biotech stock with a high dividend yield

Wall Street analysts also have a bullish view of ABBV stock and it has 15 buys and six hold ratings. None of the analyst has rated the stock as a sell. It has a median target price of $129 which is a premium of almost 20% over current prices. The street high target price of $148 is a premium of 37% while the street low target price of $105 is a discount of 2.5%.

The stock trades at an NTM PE of 8.2x which is a discount to the five-year average of 10.5x. The valuation discount looks like an opportunity and we could see some rerating in the medium to long term. Overall, ABBV is a reasonably valued biotech stock to buy in September.

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5. COMPASS Pathways (NYSE: CMPS)

Clinical stage biotech stocks are quite risky to invest in. However, the returns are also commensurate if the product that the company is developing succeeds. CMPS is among the clinical-stage biotech stocks that look good buys.

Wall Street finds CMPS a good biotech stock to buy

All six analysts polled by TipRanks have rated CMPS as a buy and its average target price of $69.93 is a premium of over 125% over current prices. It is working on treating mental health conditions. The stock could be a multibagger if the lead candidate COMP360 is successful.

Overall, while CMPS might be a risky biotech stock, it looks attractive considering the growing awareness towards mental health, especially after the COVID-19 pandemic.

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