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Dyne Therapeutics stock (NASDAQ: DYN), a biotechnology company focused on advancing genetically driven muscle diseases therapeutics, saw a significant 28% rise on Monday, May 20. This move came in after the company released a positive clinical trial data for its experimental drugs – DYNE-101 – for patients with myotonic dystrophy type 1, and DYNE-251 – for patients with Duchenne muscular dystrophy. Furthermore, in a separate release, the company proposed a public offering of its common stock.

DYN stock has been on a spectacular run, with over 165% gains this year. Looking at a slightly longer term, DYN stock has seen strong gains of 75% from levels of $20 in early January 2021 to around $35 now, vs. an increase of about 40% for the S&P 500 over this roughly three-year period. However, the increase in DYN stock has been far from consistent. Returns for the stock were -43% in 2021, -3% in 2022, and 15% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 — indicating that DYN underperformed the S&P in 2021 and 2023.

In fact, consistently beating the S&P 500 — in good times and bad — has been difficult over recent years for individual stocks; for heavyweights in the Health Care sector including LLY, UNH, and JNJ, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could DYN face a similar situation as it did in 2021 and 2023 and underperform the S&P over the next 12 months — or will it see a strong jump? The $39 average of analysts’ price estimate reflects a little over 10% upside from its current levels of $35. Note that Dyne doesn’t have any marketable product yet, and its valuation is purely based on its pipeline potential. Moreover, smaller pharmaceutical firms are often targeted for acquisition by larger ones. This is one of the reasons why DYN stock has seen such a large move this year.

While DYN stock looks like it has some more room for growth, it is helpful to see valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 5/21/2024
[2] Cumulative total returns since the end of 2016

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.