Stifel cuts NKTX stock price target to $14, maintains buy rating

On Thursday, Stifel analysts adjusted their financial outlook for Nkarta Inc . (NASDAQ:NKTX), reducing the price target to $14.00 from the previous $15.00 while maintaining a Buy rating on the stock. This aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $7 to $20, with a highly bullish consensus rating of 1.25. The stock currently trades at $1.37, near its 52-week low of $1.31, having declined nearly 88% over the past year. The revision is based on the anticipation of upcoming data from phase 1 trials, which are expected to be a significant driver for the company’s shares in the second half of 2025.

The trials in question are evaluating NKX019, a treatment for patients with lymphoma (LN) and other autoimmune diseases such as systemic sclerosis (SSc), myositis, and ANCA-associated vasculitis (AAV). These are part of the Ntrust-1 study, which is seen as a pivotal moment for NKTX. The company’s valuation has been affected by the market’s concerns regarding the pace of patient enrollment and the high standards for efficacy and safety that are perceived to be challenging to meet.

Despite these industry-wide concerns, NKTX is considered to stand out due to the logistical and safety advantages of NKX019, which align more closely with the treatments commonly prescribed by rheumatologists and immunologists. NKTX’s product is noted to be distinct from the predominantly autologous CAR-T therapy options in the autoimmune disease sector. According to InvestingPro analysis, the company maintains a strong financial position with a current ratio of 12.91, indicating robust short-term liquidity, though it’s worth noting the company is currently burning through cash rapidly.

Stifel also highlighted the strategic moves NKTX has made, such as the harmonization of NKX019 dosing across all four ongoing trials, which include Ntrust-1/2 and two investigator-sponsored trials (ISTs). This approach is expected to facilitate better cross-trial result interpretation. Additionally, the company’s recent restructuring and workforce reduction have been acknowledged as a means to extend the cash runway into fiscal year 2029, providing NKTX with increased strategic flexibility.

The updated financial model from Stifel reflects these changes, including a delayed NKX019 approval and launch timeline, now projected for fiscal year 2030. However, this delay is mostly offset by the projected reduction in operating expenses from fiscal year 2025 onwards. With a market capitalization of just $96.68 million and trading below InvestingPro’s Fair Value estimate, the stock presents an interesting opportunity for investors willing to weather near-term volatility. For deeper insights into NKTX’s valuation and 15+ additional ProTips, including detailed financial health metrics, explore the comprehensive Pro Research Report available on InvestingPro.

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