2 'Strong Buy'-Rated Stocks That Could Rally 39% to 48% in 2025

“Strong buy”-rated stocks are appealing because they typically reflect analysts' belief in the company's financial health, growth potential, and ability to outperform the market. While these, like most growth stocks, carry significant risk, the “strong buy” rating indicates that they have been thoroughly analyzed and are likely to provide significant returns to investors in the long run.

When multiple analysts rate a stock as a "strong buy," it typically indicates significant growth potential. Here are two stocks from rapidly evolving industries that could offer substantial upside.

#1. Micron Technology

With a market cap of $117.1 billion, Micron Technology (MU) is one of the leading semiconductor companies. It specializes in memory and storage solutions, such as dynamic random-access memory (DRAM) and NAND flash memory. Semiconductors are in high demand across a wide range of industries, with artificial intelligence (AI) catalyzing growth and innovation. As digital transformation accelerates globally, Micron is well-positioned to capitalize on the rising demand for memory and storage solutions.

Micron stock has gained 23.4% year-to-date, outperforming the tech-led Nasdaq Composite’s ($NASX)gain of 21.8%.

Micron's customer base is diverse, spanning industries such as consumer electronics, enterprise IT, data centers, and automotive. In the fourth quarter of fiscal 2024, Micron's total revenue of $7.7 billion increased by 92% year on year. The company also reported an adjusted profit of $1.18 per share, compared to a loss of $1.07 per share in the prior-year quarter.

Revenue increased by 61.6% to $25.1 billion in fiscal 2024, while earnings rose to $1.30 from a loss of $4.45 in fiscal 2023. 

Capital expenditure due to investments in AI totaled $8.12 billion for the full year, which led to the company generating an adjusted free cash flow of $323 million. Micron had $9.16 billion in cash, marketable investments, and restricted cash at the end of the fiscal year.

In April, Micron received $6.1 billion as part of the CHIPS Act grant to build manufacturing facilities in Idaho and New York. This bodes well for its long-term plan to establish one manufacturing facility in Idaho and four in New York, for a total of $125 billion in potential investment over the next 20 years. 

Aside from its explosive growth potential, Micron also pays dividends. Its forward yield of 0.44% is lower than the technology sector's average yield of 1.37%. However, its low payout ratio of 5.9% implies that dividends will most likely grow in the future.

Management did not provide full fiscal 2025 guidance. However, for the first quarter, the company expects a profit of $1.74 (plus or minus $0.08) per share, compared to a loss of $0.95 per share in the previous year's quarter. Furthermore, revenue is expected to increase by approximately 89% to $8.7 billion (plus or minus $200 million). 

For the full fiscal year 2025, analysts predict that Micron’s revenue could soar 52%, followed by another 20.7% growth in fiscal 2026. The company is expected to post a profit of $8.93, an eye-catching increase of 586.9% compared to fiscal 2024 EPS of $1.3. Earnings could further increase by another 42.7% in fiscal 2026. 

Based on these growth estimates, Micron stock is cheap, trading at 11 times forward earnings, compared to peer Nvidia's (NVDA) forward price-to-earnings multiple of 47x.

What Does Wall Street Say About Micron Stock?

Out of the 27 analysts covering MU stock, 23 have rated it a "strong buy," with two more suggesting a “moderate buy,” one rating it a “hold,” and one recommending a “strong sell.”

The stock’s average target price of $147.08 implies a 39.2% upside potential from Thursday’s close. Further, MU has a high target price of $250, which suggests the stock could gain as much as 136.5% over the next 12 months.

#2. BioMarin Pharmaceutical

BioMarin Pharmaceutical (BMRN) is a biotechnology company that focuses on developing therapies for rare genetic diseases. BioMarin stock has fallen 27.6% in 2024, while the S&P 500 Index ($SPX) has increased by 21.2%. 

Nonetheless, Wall Street believes the stock has enormous potential, given its work on a diverse portfolio of products - particularly in areas such as enzyme replacement therapy and gene therapy. 

BioMarin's business model focuses on high-value, niche markets with limited competition and strong pricing power. It is creating Voxzogo (vosoritide) to treat children with achondroplasia, the most common type of dwarfism. The drug has already been approved in the U.S. and Europe for children of all ages, and its market potential is significant given the scarcity of effective treatments for this condition.

Strong demand for Voxzogo in the second quarter generated $712 million in revenue, a 20% increase year on year. Its enzyme therapies business unit also experienced 15% growth in the quarter. Adjusted earnings rose by 78% to $0.96 per share.

In June 2023, the U.S. Food and Drug Administration (FDA) approved Roctavian, a gene therapy for the treatment of adults with hemophilia A. The therapy has already been conditionally approved in the European Union in 2022. This could be a significant growth driver for the company, because it is the first approved gene therapy to treat hemophilia A, a market with a high unmet medical need.

BioMarin anticipates 11 potential product launches by 2034, two of which could occur as early as 2027. The company expects to generate around $4 billion in revenue by 2027. As BioMarin's portfolio of approved therapies grows, it will be able to capitalize on the high demand for innovative treatments for rare diseases. 

Analysts predict that BioMarin's revenue will grow by 15.6% in 2024, alongside a 55% increase in earnings. Revenue and earnings are expected to grow by 11% and 32.3%, respectively, in 2025.

Valued at 16 times forward 2025 earnings and 4 times forward sales, BioMarin seems reasonably priced for a growth stock. Undoubtedly, BioMarin - like most biotech stocks - faces risks related to regulatory approval, competition, and clinical trial results. 

Investors with a high risk tolerance and a longer time horizon may find BioMarin stock appealing, especially given its strong position in the rare disease and gene therapy markets. 

What Does Wall Street Say About BMRN Stock?

Out of the 25 analysts covering BMRN stock, 19 have rated it a "strong buy," and six have rated it a “hold.”

The stock’s average target price of $103.91 implies a 48.7% upside potential from Thursday’s close. Further, it has a high target price of $138, which suggests the stock could gain as much as 97.5% over the next 12 months.

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On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.