Raymond James' Bullish Picks in a Cooling Market: Why Kalaris and Fulgent Genetics Offer High-Conviction Growth Opportunities

In a market marked by macroeconomic headwinds and sector-specific volatility, investors are increasingly seeking opportunities where strategic momentum and operational resilience can drive outsized returns. Two names highlighted by Raymond James as compelling long-term plays are Kalaris (KLRS) and Fulgent Genetics (FLGT). Both companies, operating in the high-growth but cyclical biotech and diagnostics sectors, are leveraging clinical milestones, financial discipline, and innovative business models to position themselves as high-conviction growth opportunities.

Kalaris: Clinical Catalysts and Operational Alignment

Kalaris, a clinical-stage biotechnology company, is advancing its lead candidate, TH103, for the treatment of neovascular age-related macular degeneration (nAMD). The company's strategic momentum is anchored by a clear clinical timeline and operational infrastructure. According to a report by Raymond James, Kalaris is on track to report initial data from its Phase 1a single ascending dose trial by year-end 2025, followed by Phase 1b/2 multiple ascending dose trial data in the second half of 2026. These trials aim to inform dose selection for potential Phase 3 development, a critical inflection point for biotech firms.

Operational alignment further strengthens Kalaris' case. The company has secured a CDMO agreement with KBI Biopharma, appointed a new CFO, and opened corporate headquarters, signaling readiness to scale. Financially, Kalaris holds $77.0 million in cash as of September 30, 2025, sufficient to fund operations through 2027. This liquidity buffer reduces near-term financing risks, a key concern in a cooling market where capital access for early-stage biotechs has tightened.

Fulgent Genetics: Diagnostics Growth and Therapeutics as a Call Option

Fulgent Genetics, a leader in genetic testing and emerging therapeutics, has demonstrated resilience in both its core diagnostics business and its nascent drug development arm. Raymond James recently raised its price target for FLGT to $36.00 from $25.00, citing strong Q3 2025 results. The company reported non-GAAP earnings of $0.14 per share and revenue of $84.1 million, exceeding estimates by 17.3% year-over-year. This performance has driven a full-year revenue guidance increase to $325.0 million, reflecting robust demand for its diagnostic services.

The therapeutics division, while still in early stages, acts as a "call option" for long-term value creation. Fulgent's FID-007, a Phase 2 trial candidate for head and neck cancer, has shown promising preliminary data: a 51% overall response rate and 9.2-month median progression-free survival in the 75 mg/m² dose arm in a recent presentation. These results, combined with a favorable safety profile, position FID-007 as a potential blockbuster. Meanwhile, the company's diagnostics business is nearing breakeven, supported by gross margin expansion and a $787.7 million cash reserve reported in Q3 2025.

Strategic Momentum in a Cooling Market

The appeal of Kalaris and Fulgent Genetics lies in their ability to generate near-term operational momentum while hedging against market volatility. Kalaris' clinical milestones provide clear catalysts for valuation re-rating, while Fulgent's diagnostics business offers stable cash flow and a low-cost entry into therapeutics. Both companies exemplify the "asymmetric risk-reward" profile favored by investors in uncertain environments.

Raymond James' bullish stance is further justified by their financial positioning. Kalaris' $77.0 million in cash and Fulgent's $787.7 million liquidity reported in Q3 2025 provide flexibility to navigate a potential market downturn without compromising R&D timelines. Additionally, both firms are leveraging partnerships-Kalaris with KBI Biopharma and Fulgent with its expanding patent portfolio-to de-risk development costs and accelerate commercialization.

Conclusion

In a market where growth stocks face valuation corrections, Kalaris and Fulgent Genetics stand out for their disciplined capital allocation, clear clinical pathways, and scalable business models. For investors seeking exposure to innovation in biotech and diagnostics, these names offer a compelling combination of near-term catalysts and long-term upside. As Raymond James' analysis underscores, strategic momentum-not just in science but in execution-will define the next phase of market leadership.