Why Nkarta Stock Is Soaring Today

Shares of Nkarta (NASDAQ: NKTX) were soaring 11.1% as of 11:07 a.m. ET on Wednesday. The big gain came after Raymond James upgraded the stock from outperform to a strong buy and maintained its 12-month price target at $16.

This analyst upgrade came after Nkarta provided its second-quarter update on Tuesday. The clinical-stage biopharmaceutical company expects to begin patient enrollment by year-end in an Ntrust-2 clinical trial evaluating experimental natural killer (NK) cell therapy NKX019 in treating autoimmune diseases sclerosis, myositis, and vasculitis.

The company also said its cash stockpile of $426.7 million at the end of the second quarter should be enough to fund operations into late 2027.

Why is Raymond James more bullish about Nkarta?

Raymond James analyst Laura Prendergast likes Nkarta's relatively strong cash position. She noted that the biotech has a market cap lower than its cash on hand.

Prendergast also likes the opportunities for NKX019. She believes Nkarta's NK cell therapy could be safer and easier to administer than T-cell therapies.

Is Nkarta stock a buy?

Clinical-stage biotech stocks are risky, and Nkarta is no exception. Risk-averse investors will be better off staying on the sidelines, but it could be attractive to aggressive investors with the patience to wait and see if NKX019 can deliver on its potential.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nkarta. The Motley Fool has a disclosure policy .