United Therapeutics Corporation (UTHR): Among the Cheap Healthcare Stocks to Buy Heading Into 2025

Healthcare stocks have had a challenging year, but analysts and investors are optimistic about 2025, and the sector has shown signs of recovery in recent months. For investors looking to capitalize on the healthcare sector's potential in 2025, the challenge is to find stocks where a year of underperformance has created buying opportunities. In order to discover these cheaper bets, we screened the S&P 500 Healthcare sector index for stocks down at least 10% on the year as of Dec. 29, 2024. Among those stocks, we selected the one that trades the farthest below its average analyst target price, as calculated by FactSet. The idea was to find the stock that had seen a sharp selloff but that Wall Street still thinks has room to grow.

The S&P 500 Healthcare sector index was down 2.5% on the year as of Dec. 29, 2024, while the broader S&P 500 was up 25.5%. The dramatic relative underperformance was driven by a long list of factors, including worries over drug-price reform, impending patent cliffs, the impacts of higher interest rates, and the extremely strong performance of tech stocks that bolstered the broader index. There’s reason to hope that some of those trends might reverse in 2025. The promise of lower rates could breathe life into biotech and pharma, and experts say that drug-price reform is likely priced in at current levels.



The stock that passed our screen is United Therapeutics Corporation (UTHR), a biotechnology company focused on developing and commercializing products to address the unmet medical needs of patients with chronic and life-threatening diseases in the United States and internationally. UTHR's stock has been volatile in recent months, but analysts are optimistic about its long-term prospects.

UTHR's innovative therapies, such as Tyvaso DPI and Orenitram, have significantly contributed to the company's revenue growth and differentiated it from competitors. In Q3 2024, UTHR reported record revenue of $749 million, a 23% year-over-year increase, driven by strong performances from Tyvaso DPI and Orenitram. The company's earnings per share (EPS) reached $6.39, beating analysts’ expectations of $6.16, and its net margin was 40.31%, reflecting high profitability and operational efficiency.



UTHR's focus on rare and severe diseases, such as pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD), contributes to its long-term growth potential. The company's pipeline of innovative therapies, such as Aurora-GT and Ralinepag, could further enhance its competitive position and valuation by 2025.

UTHR's expansion into organ transplantation and bioengineering, through its acquisition of Lung Bioengineering Inc. and the development of its centralized ex vivo lung perfusion service, has the potential to significantly enhance its competitive position and valuation by 2025. This expansion allows UTHR to diversify its revenue streams and tap into the growing demand for organ transplants and bioengineered organs.

In conclusion, United Therapeutics Corporation (UTHR) is a cheap healthcare stock with significant long-term growth potential. Its innovative therapies, focus on rare and severe diseases, and expansion into organ transplantation and bioengineering make it an attractive investment opportunity heading into 2025. As the healthcare sector continues to rebound, UTHR's strong fundamentals and promising pipeline position it well to outperform its peers and generate significant returns for investors.