Ardelyx, Inc. (NASDAQ: ARDX) is a clinical-stage biopharmaceutical company whose primary focus is the discovery, development, and commercialization of new, innovative, and non-systemic, small-molecule therapeutics specifically targeting gastrointestinal, metabolic, and cardio-renal diseases.

Since its initial public offering (June 19, 2014), Ardelyx Inc. stock has not changed too much. This is good since the stock is down from its $14 ipo to it's current value of $2.08. While this fall has certainly dragged the stock down into penny territory, it has been on an upswing of late. In fact, shares are near the top 5% of the stock's 52-week range.

With that, a handful of analysts have recently assessed ARDX as a BUY with a 12-month price target of $6.75. This just above the median for the wide $1.00 to $10 estimate range.

Smart Partnerships Help Soften Recent Losses

Ardelyx has been partnering with other firms across the biomedical and medical tech field(s) including Kyowa Kirin Co Ltd (OTCMKTS: KYKOF) in November of 2017 and Shanghai Fosun Pharmaceutical Group (OTCMKTS: SFOSF) a month later. Most recently, they partnered with Knight Therapeutics (OTCMKTS: KHTRF). This certainly helped the company to gain a foothold in their sector, even as stock value started to decline.

By December of 2018, the stock started to climb again, wavering up and down around $8 before its astonishing 73% plunge on July 13, 2021, when the drugmaker published a letter describing issues associated with the second FDA approval for their new kidney drug. Within the week, the stock plummeted from $7.5 to $1.68. The decline has continued, for the most part, through mid-June of this year, when the stock hit its all-time low of $0.49.

Fortunately, they managed to keep the value out of the red and analysts believe the stock is picking up momentum. Up nearly 90% on the year with an upside of around 150%, it certainly appears that the stock is not just doing well today but will continue to thrive over the coming months.

Persistent Earnings Growth Is a Key

A focus on improving earnings is likely a bit part of their strategy to increase share value. Current earnings per share (EPS) is -$0.05 on sales of $22.8 million. While the company does have some ground to make up after the dip last year, both earnings and sales suggest they are strong enough to do so by their next reporting date, which is not until March 08, 2023.

Basically, earnings have consistently increased every year until 2021, when the historic drop took place. As a matter of fact, earnings have registered near the estimate every year (since at least 2018), even as annual sales beat their respective estimates. Again, this suggests that the recent plunge could just be a small hiccup in a bigger picture of health that justifies such a big 12-month price target. Unfortunately, earnings have been in the negative the past four years; but the numbers have been improving.

On a quarterly basis, Q4 of 2021 registered $1.0 million in sales, beating the consensus estimate of $875,500. Following this, sales struggled a little in early fiscal 2022, with sales of only $468,000 showing promise but ultimately failing to meet the $875,000 consensus estimate. ARDX sales picked up again and quickly regained momentum to beat analyst estimates in Q2 and Q3 of this year.

Ardelyx is a Good Bet In Its Field

With the momentum analysts expect, the moderate buy rating issued to ARDX makes a lot of sense. Although the stock's current status is not the most exciting in its relatively short history, consistent sales certainly support the stock's potential growth. As a matter of fact, ARDX may be in a better position than other stocks in its closest proximity.

For example, Ardelyx and (Nasdaq: ACIU) have both received moderate BUY ratings while Concert Pharmaceuticals (Nasdaq: CNCE) and Bimea (Nasdaq: BMEA) have both received BUY ratings; and all are considered “healthy.” Of the four listed here, though, ARDX has the probably shortest distance to pass its 52-week high, but it also has the highest EPS (-$0.85; yes, they are all in the red). In fact, CNCE is the only other stock in this list with a positive YTD (53.02%); BMEA is down -1.21% on the year and ACIU is trying to make up at least -40.8%.

Similarly, all four of these stocks are showing negative Return-on-Equity (RoE) as well as negative Return-on-Assets (RoA). The good news is that each of the four stocks on this list just started their most recent fiscal quarter and will not report again until late February or early March of 2023. In the meantime, ARDX has a moderate BUY rating, meaning it could be smart to obtain some shares now, as the value could increase significantly by the next reporting date.