We recently compiled a list of the 10 Best UK Growth Stocks to Buy Now. In this article, we are going to take a look at where Kiniksa Pharmaceuticals International, plc (NASDAQ:KNSA) stands against the other UK growth stocks.
The start of this year has marked interesting developments for the UK market. The main stock market index has increased 5.86% since the beginning of 2025, and despite global economic uncertainties, UK equities are trading at significant discounts compared to their US counterparts. The valuation gap suggests potential opportunities for growth-seeking investors.
Reflecting on the 2024 market, economic uncertainties and fluctuations were dominating factors, which required investors to examine stock performances more closely. Interestingly, smaller companies performed the best in the UK market, delivering returns of 13.78%, while the larger companies were close behind, with a return of 9.66%. In an unpredictable environment, high institutional and hedge fund ownership in growth companies indicates strong investor confidence, which could mean potential for long-term value creation.
Growth stocks are stocks that tend to outperform the broader market. They are company stocks that are likely to grow at a significantly higher rate than the average growth for the market. These companies often reinvest their profits to fuel further growth rather than paying dividends. Investors are typically attracted to growth stocks due to the potential for attractive capital appreciation over time. More often, these are smaller stocks or startups that gain a sudden uptick due to the industry or tech push.
Growth Stocks Vs Value Stocks
Growth stocks are typically priced higher relative to current earnings due to anticipated future growth. They typically trade at a high price-to-earnings (P/E) ratio. Compared to them, value stocks are priced lower relative to their fundamentals and are seen as undervalued in the market. While growth stocks tend to operate in dynamic industries such as tech, value companies may be in more established industries and offer dividends. In 2024, value investing slightly outperformed growth in the UK, which necessitates the need to create a diversified investment approach.
Identifying Growth Stocks
While most growth stocks are small companies with market potential, they can also be larger firms where the company has a growth mindset and its share values continue to rise. There are still some common traits that all growth stocks share. The foremost characteristic is the company’s constant stronger financial performance compared to its peers. If the company is growing at a percentage higher than the average growth of the market, it has growth potential better than its peers. Secondly, growth stocks are typically companies that have a stronger or unique product line with a loyal customer base. They have investments in technology to build an edge over competitors. With a strong focus on innovation, they ensure they are ahead in the race to capture greater market shares in their industry. They might also be companies that have high potential to grow in the future, perhaps through a market build-up, expecting to reach key milestones in the future.
While these shares can have high potential and, thus, be attractive to investors, they can also be high-risk, with stock expectations going south.
In the current market scenario, growth stocks offer several advantages. Primarily, there is the potential for significant increases in stock value as companies expand. Growth stocks can act as a hedge against inflation, as companies with strong growth can outrun inflation. Positive outlooks and focus on innovative sectors can also accumulate investor interest and elevate stock prices. It is, however, key to consider the inherent risks to avoid drastic declines.
Our Methodology
To compile our list of the 10 best UK growth stocks to buy now, we screened the 20 largest companies in the UK in growth-related industries. We then ranked our choices by revenue growth potential and hedge fund sentiments.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points. (see more details here).
A close-up of a scientist in a lab coat inspecting a vial of therapeutic medicine.
Kiniksa Pharmaceuticals International, plc (NASDAQ:KNSA)
Revenue growth past 5 years: 140.87%
Number of hedge fund holders: 31
Kiniksa Pharmaceuticals International, plc (NASDAQ:KNSA) is a commercial-stage biopharmaceutical company focusing on the development and delivery of innovative therapies for patients suffering from debilitating cardiovascular and autoimmune diseases. Headquartered in London, UK, Kiniksa’s portfolio includes immune-modulating assets designed to address a range of inflammatory conditions. The company’s flagship product, ARCALYST, has been a key catalyst in cementing Kiniksa’s position in the biopharmaceutical industry. It is among the best UK growth stocks to buy.
ARCALYST is approved for the treatment of recurrent pericarditis, and since being launched in April 2021, it has seen significant adoption among healthcare providers. The success of the therapy has demonstrated Kiniksa’s commitment to addressing critical medical needs in the cardiovascular space.
Kiniksa Pharmaceuticals International, plc (NASDAQ:KNSA) showcased robust sales for ARCALYST with a revenue growth of 79% year-over-year, reaching $417.0 million in 2024 and $122.5 million for Q4 2024. The robust figures highlight the strong market demand for ARCALYST and showcase the company’s effective commercial strategies and market position. The company has a cash position of $243.6 million as of December 31, 2024, a notable increase from $206.4 million a year earlier. Despite the strong performance of ARCALYST, the company reported a net loss of $8.9 million for Q4 and $43.2 million for the full year. Kiniksa, however, expects its current operating plan to remain cash flow positive on an annual basis, demonstrating prudent financial management and operational efficiency.
Kiniksa Pharmaceuticals International, plc (NASDAQ:KNSA) has provided optimistic guidance for 2025, projecting ARCALYST net product revenue between $560 million and $580 million. This forecast is reliant on the continued adoption of ARCALYST and the company’s strategic focus on expanding its product pipeline. The stock has a 3-year return of 89.48%, suggesting that it has experienced strong stock price appreciation over the past three years, also reflecting a substantial growth in shareholder value.
Overall KNSA ranks 3rd on our list of the best UK growth stocks to buy. While we acknowledge the potential for KNSA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KNSA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.