Analysts Predict Up to 400% Spike for These 2 ‘Strong Buy’ Penny Stocks

While mega-cap tech stocks with trillion-dollar valuations tend to dominate market headlines, they aren’t the only games in town. Smaller companies, especially those at the low end of the price spectrum, can offer meaningful upside. These are the so-called penny stocks – traditionally associated with shares trading for just pennies, but today defined more broadly as stocks priced below $5.

At these low price levels, even small absolute price increases can translate into outsized percentage gains. Of course, the same dynamic applies to losses, making careful stock selection especially important.

This is where separating the penny stocks poised to take off from those likely to stay in the dumps becomes critical. One way to narrow the field is by looking at where Wall Street analysts are placing their bets – and biotech is high on that list. In this sector, stocks are often driven by clear catalysts such as clinical trial data, regulatory decisions, and new product launches. These events can quickly shift investor sentiment and materially affect valuations.

One of the more bullish voices on biotech’s revival is UBS analyst Michael Yee, who sees improving conditions across the sector.

“Following prolonged underperformance driven by pricing pressures, FDA uncertainty, capital scarcity, and high interest rates, biotech is exiting a cyclical trough. The macro environment and sector fundamentals are improving – capital access is reopening, FDA approvals are rising, clinical data momentum is building, and M&A is accelerating. We expect investor confidence to recover, positioning biotech for strong performance in 2026,” Yee opined.

With that backdrop in mind, we turned to the TipRanks database to zero in on two biotech penny stocks drawing strong support from Wall Street analysts. Both carry a Strong Buy consensus rating and significant upside potential, with one offering room for gains of up to 400%. Let’s take a closer look at what’s behind that optimism.

Acumen Pharmaceuticals (ABOS)

We’ll start with Acumen Pharmaceuticals, a micro-cap biotech company taking on one of medicine’s biggest challenges – Alzheimer’s disease. Acumen is developing new treatments aimed at slowing the progression of the illness, with a mission the company sums up as helping patients “hold on to their moments.” It’s a goal that puts the company in the middle of a massive and growing market opportunity. According to the Alzheimer’s Association, more than 7 million people in the U.S. are living with Alzheimer’s disease, a figure projected to climb to nearly 13 million by 2050 as the population ages.

Unlike many approaches that have focused on amyloid plaques, Acumen is taking a somewhat unconventional path by targeting toxic amyloid-beta oligomers (AβOs) – small, soluble forms of amyloid that research suggests may act as early triggers and long-term drivers of synaptic dysfunction and neurodegeneration in Alzheimer’s.

Acumen’s lead drug candidate, sabirnetug, is a humanized monoclonal antibody engineered specifically to target these toxic soluble AβOs, with the goal of preserving neurological function by keeping these toxins from binding to synapses and wreaking havoc.

In its Phase 1 clinical trial (INTERCEPT-AD), sabirnetug showed a favorable safety profile with low overall rates of ARIA-E – a type of brain swelling sometimes seen with anti-amyloid therapies – along with evidence of target engagement and positive biomarker effects, including reductions in amyloid plaque measures at the higher doses tested. The therapy’s potential was further underscored by the Fast Track designation granted by the FDA for the treatment of early Alzheimer’s disease, a regulatory status that helps streamline the development and review of promising medicines.

With those early results in hand, this past November, Acumen announced that it had begun dosing the first participant in the Phase 2 ALTITUDE-AD trial’s open-label extension, extending treatment for an additional year in participants who completed the initial controlled portion of the study. That Phase 2 trial evaluates sabirnetug’s ability to slow cognitive and functional decline in people with early Alzheimer’s, and the company currently plans to share topline results in late 2026.

While sabirnetug continues to move through clinical testing, Acumen is also working on a next-generation strategy aimed at improving how antibodies reach the brain. In July 2025, the company entered a strategic collaboration with JCR Pharmaceuticals to develop an amyloid-beta oligomer-targeted Enhanced Brain Delivery (EBD) therapy. Through this partnership, Acumen is pairing its AβO-selective antibodies with JCR’s blood-brain-barrier-penetrating technology, known as J-Brain Cargo, to create drug candidates designed for far greater central nervous system exposure. Acumen expects non-clinical data to support the EBD program in early 2026, at which point it will have the exclusive option to select and advance up to two development candidates emerging from the collaboration.

With a major catalyst ahead and ABOS shares trading at $1.98, Stifel’s 5-star analyst Paul Matteis thinks now is the right time to make a move.

“With the upcoming ph2 ALTITUDE-AD readout for sabirnetug in early Alzheimer’s expected in late 2026, ABOS has an important year ahead of them. After the stock has been largely tied to the progression of the donanemab/lecanameb launches – with shares trading at/below cash – 2026 represents a major potential inflection point for the stock… We’re encouraged by the initial data from sabirnetug’s ph1b, which illustrate that the oligomer hypothesis has the potential to clinically differentiate vs older-generation abetas. To that point, the fact that the ph2 completed enrollment on time reflects there’s continued demand from patients for novel treatments. We like the design/set-up of ALTITUDE-AD, offering a real evaluation of the oligomer mechanism across validated AD clinical scales,” Matteis noted.

To this end, Matteis rates ABOS a Buy, and his $10 price target points to a massive 405% upside over the next year. (To watch Matteis’ track record, click here)

Overall, the Street agrees that the outlook is bullish. The stock has 5 recent Buy ratings, and no Holds or Sells, forming a unanimous Strong Buy consensus. The $6.40 average target price implies a 223% gain on a one-year basis. (See ABOS stock forecast)

SAB BIO (SABS)

The second penny stock we’re diving into, SAB BIO, is a clinical-stage biotech company focused on advancing new treatments for autoimmune diseases – particularly Type 1 diabetes. Rather than just managing symptoms, SAB is working on immunotherapies designed to slow or potentially alter disease progression by targeting the immune system itself, a strategy that could offer a different path than today’s standard care.

Leading the program is SAB-142, a fully human, multi-targeted anti-thymocyte globulin (hATG) immunotherapy developed using SAB’s proprietary genetic engineering platform. Unlike traditional therapies that broadly suppress the immune system, SAB-142 is engineered to modulate immune activity in a way that may preserve pancreatic beta-cell function in Stage 3 autoimmune Type 1 diabetes.

Importantly, SAB-142 has already delivered encouraging early-stage results. In late December, the company reported positive confirmatory data from its Phase 1 study showing the treatment was well tolerated, with no serum sickness, no drug-related serious adverse events, and no meaningful immunogenicity even with repeat dosing; transient lymphopenia seen after dosing resolved quickly across all participants.

With that safety profile in hand, SAB has moved SAB-142 into later-stage testing with the launch of the Phase 2b SAFEGUARD clinical trial. This global, multi-center, randomized, placebo-controlled study aims to assess the safety, efficacy, and tolerability of SAB-142 in people with new-onset Stage 3 Type 1 diabetes. The first patient has been dosed, with sites active in the U.S., Australia, and New Zealand, and plans for expansion to Europe. Data from this Phase 2b study are expected in the second half of 2027.

That progress has caught the attention of UBS analyst Michael Yee, who remains upbeat on the stock’s prospects.

“We believe SABS’ approach is well validated by preliminary clinical data from Thymoglobulin in Type 1 diabetes showing improvements in C-peptide and HbA1C improvements. SABS is de-risked by Phase I results with clean safety including no evidence of serum sickness supporting a favorable tolerability profile and re-dosing potential. We think SAB-142 has the potential to succeed in showing improvements in C-peptide and HbA1c, which would be an important differentiator in the broad Stage 3 market… The stock is currently trading with an EV of ~$600-700M after accounting for future cash expected from milestone-based warrant exercises and full dilution, which we believe suggests the market has not fully priced in the sales potential and estimated POS for SAB-142 in T1D,” Yee commented.

On the back of that view, Yee rates SABS a Buy with a $7 price target, implying upside of 73% over the next year. (To watch Yee’s track record, click here)

Yee is joined by two other bullish analysts who are even more optimistic on the stock, earning it a Strong Buy consensus rating. At $4.04 per share and with an average price target of $10.33, the stock offers potential upside of ~156% over the next year. (See SABS 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.