Analysts Predict Up to ~590% Spike for These 2 ‘Strong Buy’ Penny Stocks

Big names may rule the headlines, but many of the market’s future stars begin as under-the-radar underdogs. While Wall Street focuses on the trillion-dollar club – think the ‘Magnificent 7’ – some of the most compelling opportunities are tucked away in the bargain bin, trading for $5 or less.

These low-priced stocks – known as penny stocks – often operate in high-growth corners of the market, and when the right catalyst hits, whether a breakthrough innovation or a disruptive product, they can deliver explosive gains.

That said, not every penny stock is a diamond in the rough. Some linger at the bottom for good reason, dragged down by shaky fundamentals or challenges that may be too big to overcome.

So, how do you spot the ones ready to take off? That’s where Wall Street’s analysts come into play.

Using TipRanks’ database, we’ve zeroed in on two standout penny stocks earning high marks from analysts. Both boast a ‘Strong Buy’ consensus rating and substantial upside potential – with one eyeing a nearly 590% surge. Let’s take a closer look and find out what the optimism is all about.

Skye Bioscience (SKYE)

We’ll start with Skye Bioscience, a biopharmaceutical researcher developing new treatments for metabolic disorders, with a particular focus on obesity. This is a fertile area for an innovative biotech firm – the global anti-obesity drug market is projected to grow from $12.8 billion in 2025 to $104.9 billion by 2035, reflecting a 21.1% CAGR over the forecast period. Beyond its prevalence, obesity contributes to a host of physical and mental health complications, creating a need for effective therapies.

To meet this need, Skye is taking a novel approach to weight loss by targeting the CB1 pathway through selective inhibition. Its lead candidate, nimacimab, is a peripherally restricted CB1 inhibitor, specifically designed to sidestep the central nervous system side effects that limited earlier CB1-targeting drugs. Now in a Phase 2a clinical trial, CBeyond, nimacimab is approaching a key catalyst: the release of topline data expected in late Q3 or early Q4 2025.

In earlier testing at the preclinical and Phase 1 stages, nimacimab demonstrated encouraging results. In an April update, Skye reported that in a mouse model, combining nimacimab with tirzepatide (a dual GLP-1/GIP agonist) resulted in over 30% weight loss after 25 days. Nimacimab alone produced a 23.5% reduction, comparable to monotherapies with tirzepatide or monpelabant. Supporting its safety profile, multiple reviews by the Data Safety Monitoring Committee have been completed with no concerns raised to date.

Looking ahead to future clinical development and potential commercialization, Skye has partnered with Arecor Therapeutics to explore a new formulation of nimacimab. Under the agreement, Skye will fund the development using Arecor’s proprietary formulation platform and holds an option to license the resulting formulation, including associated intellectual property and commercialization rights.

With SKYE trading at $2.16, JMP analyst Jonathan Wolleben sees a big opportunity brewing – especially with a topline data readout just around the corner.

“We continue to like nimacimab’s position in the CB1 inhibitor pipeline as a truly peripherally restricted inhibitor, and we view the rapid and over-enrollment of CBeyond as reflective of the high patient enthusiasm for the differentiated mechanism in the obesity pipeline. We think CBeyond is well-designed to answer key safety and efficacy questions, and we like that the DSMC reviews have not raised any concerns to date. Given the history of mechanism, safety will be top of mind for investors. Recall that SKYE saw no neuropsychiatric side effects in its prior Phase 1 and no accumulation in the CNS or brain in non-human primates… We’ll see 26-week weight loss data from SKYE’s Phase 2a trial in late 3Q/early 4Q where the study is powered to detect an 8% pbo-adj. difference which we would view as a win and should drive shares higher,” Wolleben opined.

Backing his bullish case, Wolleben rates SKYE a Buy with a $16 price target, implying a massive one-year upside potential of 594%. (To watch Wolleben’s track record, click here)

The overall view of SKYE is even more bullish than that. The stock’s Strong Buy consensus rating is unanimous, based on 6 positive analyst reviews, and the $17.20 average price target suggests a whopping 696% premium over the next 12 months. (See SKYE stock update)

PolyPid (PYPD)

Surgery is difficult for patients, even under the best conditions, with infection, inflammation, and pain among the potential post-operative complications. PolyPid, a clinical-stage biopharmaceutical company, is working to address these issues through improved medication delivery.

The company has developed a proprietary drug delivery platform called PLEX (polymer-lipid encapsulation matrix), designed to provide targeted, localized, and sustained release of post-operative medications. This layered system – built from alternating polymers and lipids – can deliver a wide range of therapeutic agents, including small molecules, proteins, peptides, and nucleic acids. PLEX is engineered to maintain drug potency and minimize toxicity, enabling controlled release over extended periods, potentially lasting several months.

Leveraging this platform, PolyPid developed its lead product candidate, D-PLEX100, which has been evaluated in two Phase 3 clinical trials – SHIELD I and SHIELD II – focused on preventing surgical site infections following abdominal colorectal procedures.

While the SHIELD I study did not meet its primary endpoint, PolyPid announced positive topline results from SHIELD II earlier this month. The trial achieved both its primary and key secondary endpoints, demonstrating statistically significant benefits in 798 patients undergoing large abdominal surgeries. With these results, the company is preparing for a potential New Drug Application (NDA) submission in early 2026 and views the data as a catalyst for advancing global partnership discussions.

To support its next steps, the company also secured up to $26.7 million in funding through the exercise of outstanding warrants, extending its cash runway beyond the expected FDA approval window for D-PLEX100.

Roth Capital analyst Boobalan Pachaiyappan views the SHIELD II results as a turning point – not only confirming clinical efficacy but also laying out a compelling path toward regulatory approval and a sizable market opportunity for D-PLEX100.

“D-PLEX100 delivered efficacy across the board on all secondary endpoints… Although a comprehensive safety data analysis was not presented, given that only top-line data are available, the lack of safety signals suggests that D-PLEX100 is safe and tolerable, exhibiting a profile consistent with previous studies, and is suitable for treating SSI patients… We expect D-PLEX100 FDA approval in 2H26, with the initial launch in 2027 focusing on colorectal surgeries (partner: TBD) and the EU/U.K. launch in 2028 (partner: ADVANZ Pharma; private), with subsequent launches within the broader abdominal procedures category (~4.5M surgeries) in the following years… Our models suggest >$800M in peak sales in 2035, with PYPD revenue >$200M (net royalty rate: 25%),” Pachaiyappan wrote.

Pachaiyappan quantifies his positive stance with a Buy rating on PYPD and a $9 price target that points toward a one-year gain of 174%. (To watch Pachaiyappan’s track record, click here)

Overall, there are 5 recent analyst reviews on record for PYPD shares, and the 4-to-1 split, favoring Buy over Hold, gives the stock its Strong Buy consensus rating. The shares are priced at $3.28, and their $11.50 average target price suggests an upside of 250% on the one-year horizon. (See PYPD stock forecast)

To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.