15 Small-Cap Healthcare Stocks Hedge Funds Are Buying

Page 14 of 14

1. Insmed Incorporated (NASDAQ:INSM)

No. of Hedge Fund Holders: 72

Market Capitalization: $11.96 Billion

Analyst Upside: 49.30%

Insmed Incorporated (NASDAQ:INSM) is a global biopharmaceutical firm that is engaged in advancing a diverse portfolio of approved and mid- to late-stage investigational medicines and drug discovery. Insmed’s advanced programs are in pulmonary and inflammatory conditions. It is developing a protein, rhIGFBP-3, to improve chemotherapy effectiveness in breast cancer.

Insmed Incorporated (NASDAQ:INSM) posted a revenue of $92.82 million during Q1 2025, surpassing estimates by $1.58 million and up 23% year-over-year. The revenue was driven by strong demand for ARIKAYCE in Japan, Europe, and the U.S. Although the company missed earnings estimates, it is expected to improve its earnings in Q2 and lower its losses. Analysts expect INSM to post an EPS of -$1.30 per share, a notable improvement from -$1.42 in Q2 2024. A successful launch of ARIKAYCE will help the company improve its revenue in the future.

On May 9, Trung Huynh from UBS slightly lowered the price target of INSM from $110 to $109, keeping a Buy rating on the shares. The analyst remains positive on INSM as the company expects brensocatib, a therapy for chronic inflammatory lung diseases, to launch in the third quarter of 2025.

While we acknowledge the potential of INSM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that has gone up since the beginning of 2025, while popular AI stocks have lost around 25%. If you are looking for an AI stock that is more promising than INSM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.

Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 14 of 14