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On Wednesday, Stifel analysts maintained a Buy rating and a $10.00 price target for Alto Neuroscience (NYSE: ANRO), suggesting a positive outlook for the company’s stock. Currently trading at $3.15 and near its 52-week low of $3.08, InvestingPro analysis indicates the stock is undervalued. The analysts highlighted that the stock is trading below cash value, which presents a favorable risk/reward balance.
The interim analysis results for the ALTO-300 study were released, confirming that the study would not be affected by quality or conduct issues, and the problems that affected ALTO-100 would not be repeated. The analysis led to an increase in the number of study participants, slightly above the original plan, indicating a discernible effect of the drug over placebo. With a market capitalization of $83.88 million, ANRO represents a focused investment in the neuroscience sector.
Although the increase in study size means that the final data will now be expected in mid-2026, Stifel views this adjustment as a positive sign. It suggests confidence in the drug’s efficacy, aiming for a robust effect size. Alto Neuroscience has assured that they have sufficient cash to support their operations until the data is available. InvestingPro data confirms strong liquidity with a current ratio of 13.09, though investors should note the company is quickly burning through cash. For detailed financial health metrics and additional insights, consider exploring InvestingPro’s comprehensive analysis tools.
The continuation of the study signals a potential for a significant effect size, with ANRO seeking to achieve a Cohen’s D of approximately 0.4. This statistical measure indicates the magnitude of the drug’s effect compared to the placebo, with a higher number representing a stronger effect.
Alto Neuroscience’s decision to increase the number of participants in the study is a strategic move to enhance the statistical power and ensure that the results are conclusive. The company’s proactive approach to addressing previous issues and their financial stability to see the study through to completion are seen as positive indicators for investors.
In other recent news, Alto Neuroscience, Inc. has made significant strides in its ongoing clinical trials and financial operations. The company recently announced the continuation of its Phase 2b trial for ALTO-300, a treatment for major depressive disorder (MDD). This decision was made following a favorable interim analysis, and topline results are expected by mid-2026.
Alto Neuroscience also revealed its estimated year-end cash balance for 2024, which is approximately $168 million. This amount is anticipated to sustain the company’s planned operations until 2028. However, the company noted that its final financial results for 2024 may differ from these preliminary estimates.
In addition to its clinical developments, Alto Neuroscience has initiated an "at the market" offering program with Leerink Partners LLC. The program involves the potential sale of common stock shares with an aggregate offering price of up to $75 million. The company retains the right to control the timing and amount of stock sold, and can suspend or terminate the offering at any time.
Furthermore, Jones Trading recently initiated coverage on Alto Neuroscience shares with a Buy rating, setting a price target of $18.00. This rating reflects confidence in the company’s strategic approach and its potential for growth, particularly in the development of treatments for central nervous system diseases. These recent developments highlight Alto Neuroscience’s ongoing efforts in both its clinical trials and financial operations.
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