Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 20 Dec, 24 | ALLK | Speculative Buy | USD 1.29 | USD 1.39 | USD 1.48 | 1 day | 14.7% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Allakos Inc., a clinical stage biotechnology company, develops therapeutics that target immunomodulatory receptors present on immune effector cells in allergy, inflammatory, and proliferative diseases in the United States. The company's lead product candidate is AK006, which in a Phase I clinical trial for the treatment of chronic spontaneous urticaria (CSU) and other indications. The company was incorporated in 2012 and is headquartered in San Carlos, California.
Reduction in Expenses: Research and development expenses decreased by $25.8 million (from $36.7 million in Q3 2023 to $10.9 million in Q3 2024), reflecting cost-saving measures and the exit from lirentelimab development.
Strong Cash Position: Ended Q3 2024 with $92.7 million in cash, cash equivalents, and investments, with sufficient runway projected into mid-2026.
Cash Burn Rate: Net decrease in cash, cash equivalents, and investments was $30.4 million during Q3 2024, with $18 million attributed to costs from exiting the lirentelimab program, signaling ongoing financial pressure.
Net Loss: Reported a net loss of $18.4 million in Q3 2024, although reduced from $45.6 million in Q3 2023, it still represents a significant financial challenge.
Allakos faces investment risks from its high cash burn rate, reliance on the success of AK006 in early-stage trials, financial dependency on cost restructuring, and limited revenue streams following the termination of the lirentelimab program.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 1.29 | 1.14 | 1.39 | 1.48 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the daily chart)
The share price of ALLK found support at crucial levels and began to rise, suggesting the potential for short-term gains. As the stock progresses upward, it is expected to face a significant resistance level at USD 1.502, which could be approached in the near term, likely within the next 2-4 weeks. If the stock successfully breaches this level, it could lead to further buying momentum and potentially extended gains in the stock.
Technical Indicators Analysis (On the daily chart)
On the daily chart, the 14-period Relative Strength Index (RSI) is positioned above the midpoint, suggesting the potential for an upward movement. Furthermore, the stock price moving above its 21-day and 50-day Simple Moving Averages (SMAs), supporting positive bias.
As per the above-mentioned price action and technical indicators analysis, Allakos Inc. (NASDAQ: ALLK) is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Biotechnology
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to EBITDA (x) | |
|---|---|---|---|---|---|---|---|---|
| ALLK Allakos Inc |
-0.0026 1.14% | 0.23 | - | - | - | 1.05 | -0.5048 | |
| NVO Novo Nordisk A/S |
-0.8143 1.17% | 68.63 | 41.58 | 31.15 | 2.13 | 32.99 | 2.11 | 4.70 |
| NONOF Novo Nordisk A/S |
0.0025 0.0036% | 68.96 | 41.06 | 31.25 | 2.08 | 33.11 | 2.11 | 4.70 |
| VRTX Vertex Pharmaceuticals Inc |
0.03 0.0062% | 484.85 | 29.67 | 24.33 | 10.38 | 5.83 | 9.33 | 20.00 |
| REGN Regeneron Pharmaceuticals Inc |
-7.26 1.14% | 626.97 | 29.07 | 20.12 | 7.57 | 3.82 | 6.95 | 19.42 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 19, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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