Innovative companies: ARK boss Cathie Wood recently added to these two stocks

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• ARK boss looking for companies that focus on new technologies
• Cathie Wood: Market capitalization of disruptive innovations is likely to multiply
• Wood has increased in two innovative companies

At the beginning of 2021, Cathie Wood’s flagship ETF, the ARK Innovation ETF, reached a peak – since then it has had to lose a lot of feathers. Nevertheless, ARK boss Chathie Wood continues to stick to her strategy and invests in companies that rely on new technologies. “We believe – and to cite just a few numbers – that truly disruptive innovation will grow from $7 trillion in market cap today to $210 trillion by 2030, from less than 10% of the broad public equity market to more than 60%. And if you neglect innovation, you will miss out on some of these incredible opportunities,” TipRanks quotes Wood as saying.

Only recently, with ARK Invest, she struck again at two innovative companies that are also popular with other Wall Street analysts.

UiPath Stock

One of the two companies that Cathie Wood has struck is UiPath – a company specializing in robotic process automation (RPA). As UiPath writes on its website, the company started in 2005 as a ten-strong team based in Bucharest, led by CEO Daniel Dines. Initially, UiPath outsourced automation libraries and software to some of the world’s largest companies. The company now offers free courses for its UiPath Academy and teaches RPA to more than 35,000 now-certified developers. As TipRanks reports, UiPath’s customers include big names such as Google, Airbus and GE. The goal of the company: “Bill Gates used to talk about a computer in every household at Microsoft. I want a robot for every human being,” said UiPath CEO Daniel Dines.

For the second fiscal quarter of 2023, ended July 31, UiPath had revenue of $242.2 million, an increase of 24 percent compared to the same period last year. The company was able to increase its annual recurring sales by 44 percent to 1.043 billion US dollars. Meanwhile, a loss of two cents per share hit the books. Cash burn was $23.7 million. UiPath put the liquid funds at 1.7 billion US dollars.

Meanwhile, the UiPath share on the NYSE fell by around 72 percent this year to 12.05 US dollars (closing price on October 26, 2022). TipRanks writes about an innovative company working in the fields of AI and software automation that is currently trading at a deep discount.

Cathie Wood had previously invested in the company, but during the September-October 2022 period, her five ARK ETF funds bought an additional 10.6 million shares of UiPath, according to TipRanks. She now owns a total of 42,759,557 shares of the company, worth well over $475 million at current prices.

But Cathie Wood is not alone in her optimism about UiPath. As TipRanks reports, Wells Fargo analyst Michael Turrin is also bullish on UiPath stock, writing about the outlook going forward: “Our key takeaway is that UiPath continues to make the necessary changes to adapt to the current environment to adjust (+ earlier phase of hyper-growth) and maintain market share in the growing automation market.While the severely slowing profile is likely to keep PATH in the ‘show-me’ camp and keep stocks in the NT volatile, proposition automation remains a spending priority, and the muted outlook for 2H/FY24 leaves room for improvement well beyond current expectations…”. Turrin rates the stock as a buy, with a target price of $16, promising upside potential of around 33 percent.

Overall, analyst consensus gives UiPath a moderate Buy rating based on 17 recent ratings – nine buys and eight holds, according to TipRanks. Analysts’ average price target of $18.38 implies upside potential of around 53 percent.

Verve Therapeutics stock

The other company that ARK CEO Cathie Wood has struck at recently is biopharmaceutical company Verve Therapeutics. According to the company, it is working on the development of gene-editing drugs to treat patients with cardiovascular diseases, which are considered the leading cause of death worldwide. “Verve brings together multiple breakthroughs in 21st-century biomedicine – human genetic analysis, gene editing, messenger RNA (mRNA)-based therapies, and lipid nanoparticle (LNP) delivery – to create a new future of longevity and vitality for millions of people people with or at risk of cardiovascular disease around the world,” writes the company on its website.

Verve Therapeutics currently has two candidates in its pipeline. As TipRanks reports, the lead product candidate VERVE-101 has only recently entered the clinical trial phase. The drug candidate is a novel compound designed to turn off the PCSK9 gene in the liver and reduce the production of “bad” low-density lipoprotein cholesterol (LDL-C).
Verve Therapeutics’ second gene-editing program, VERVE-201, targets the ANGPTL3 gene, which regulates cholesterol and triglyceride metabolism. “The ANGPTL3 gene has recently emerged as a new and promising target for severe hyperlipidemia,” the company explains. Just last August, at the European Society of Cardiology 2022 Congress, Verve Therapeutics released pre-clinical data supporting the nomination of product candidate VERVE-201 ANGPTL3 for clinical trials.

If you take a look at the company’s figures, you will see that the company has not yet generated any sales and posted a net loss of $40.9 million in the second quarter of 2022. But Cathie Wood apparently sees potential. In September, she bought 831,145 shares of Verve Therapeutics through her ARK Innovation ETF and another 321,630 shares through the ARK Genomic Revolution ETF, according to TipRanks. She now holds more than 859,000 shares through ARK Innovation and approximately 2.37 million shares through ARK Genomic, which together are worth more than $98 million.

This year, Verve Therapeutics shares on the NASDAQ rose by just 0.35 percent to $37.00 last time (as of the closing price on October 26, 2022), which compares the paper to the significant losses of other stocks so far held up well.

In addition to ARK boss Cathie Wood, Stifel analyst Dae Gon Ha also sees potential at Verve Therapeutics. “We believe catalysts such as VERVE-101 IND and its clinical data (2023) will propel shares. We plan to reassess our long-term propositions in due course, but for now, our diligence on the upcoming catalysts (talks with three former KOLs and FDA management and precedents from IND) optimism for VERV’s 1-2 year outlook,” TipRanks echoed the analysts. Accordingly, Ha rates the shares as a buy with a price target of $56, implying upside potential of 51 percent in one year.

TipRanks currently has eight analyst ratings for Verve Therapeutics stock. Of these, six Wall Street analysts recommend the stock as a buy, while two recommend holding the stock. Analysts’ average target price is $50, about 35 percent above the current share price.

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