Is Catalyst Pharmaceuticals, Inc. (CPRX) the Best Russell 2000 Stock to Buy According to Wall Street Analysts?

We recently published a list of 11 Best Russell 2000 Stocks to Buy According to Wall Street Analysts. In this article, we are going to take a look at where Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) stands against other best Russell 2000 stocks to buy according to Wall Street analysts.

Since President Trump announced new tariffs, the U.S. stock market has been steadily declining. The Wall Street Journal has estimated the loss to be around $6.6 trillion. Many large economies like China and the EU have started retaliating against these new rates, sparking a global trade war and making investors scramble to make sense of the chaos.

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Is this a buying opportunity or a trap? This is the question investors, market experts, and analysts are currently asking themselves. While social media is buzzing with calls to buy the dip, experts call the attempts to time the market a fool’s errand. Predicting market moves is impossible without sheer luck, and when investors make their decisions by relying on such luck, they also inherit the huge risk accompanying it. Waiting on the sidelines can be painful, too, since some experts strongly believe that the best returns follow the most significant dips. To use the opportunity, however, investors need disciplined strategies backed by valuable information regarding the market and the stocks.

Combining the strategy with credible information, we have compiled a list of the 11 best Russell small-cap stocks that income-seeking investors may be interested in buying. Though mega-cap stocks dominate the headlines, small-cap companies in the Russell index also quietly steal the spotlight. These companies, often called America’s economic backbone, are domestically focused, which prevents them from taking on the full impact of tariff crossfires. Also, thanks to their agility and growth potential, small caps have a history of outperforming large caps during early-cycle recoveries. The consecutive rate cuts by the Fed to counter recession risks this year could also favor these stocks since low borrowing cost leads to progress in the companies’ expansion plans.

Understanding their potential, Wall Street analysts are combing through the Russell small-cap companies to find valuable stocks that incorporate resilience and growth. Amidst the growing uncertainties surrounding the mid-caps and even large-caps, small-caps in the Russell index, backed by the analysts’ ratings, might prove to be a safer harbor for investors.

Our Methodology

We have put together our list by following a few criteria. Primarily, all the stocks we have considered for our list are small caps and part of the Russell 2000. We have filtered out those stocks that do not have a strong Buy rating from the analysts. The criteria ensured that all the picks in our list have future growth potential, benefiting income-seeking investors. The average volume has been set at 100,000 to gather stocks with strong liquidity.

Additionally, we have included only those stocks with positive earnings per share (EPS) over the past five years, which provides a historical overview of the companies’ growth. All the data in the article was taken from financial databases and analyst reports, with all information updated as of April 7, 2025. To rank the stocks, we used the hedge funds in the Insider Monkey database as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)

Upside potential: 51.31%

No of hedge funds: 35

A commercial-stage biopharmaceutical company, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is focused on developing and distributing pharmaceutical products for rare neuromuscular and neurological diseases. Their flagship product, Firdapse, treats Lambert-Eaton Myasthenic Syndrome (LEMS). Continuing research on the product further targets orphan indications. Against heavy competitors like Sarepta in the market, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) succeeds through orphan drug exclusivity and targeted R&D investments. Regulatory incentives and strategic acquisitions give the company a competitive edge in underserved therapeutic categories.

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) has recorded 34.27% EPS growth over five years, heavily contributed by the demand for its flagship product, Firdapse, in the market. The strong commercial performance has led to a 23.5% growth in total revenue, reaching $491.7 million in 2024. The revenue includes a $2.1 million milestone payment earned by DyDo Pharma, the sublicensee of Catalyst for Firdapse in Japan. Having gained approval to commercialize the product, the company expects sales to grow in Japan soon. Additionally, AGAMREE, the new product launched in March 2024 for treating Duchenne muscular dystrophy, is projected to deliver double the revenue, contributing close to 20% of the expected overall turnover in 2025.

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) manages to acquire the support of 35 hedge funds at the end of Q4 2024, raising its institutional interest. Having assigned a Buy rating, analysts have forecasted a 51.31% upside, ensuring its entry into our list of best Russell 2000 stocks.

Overall, CPRX ranks 3rd on our list of best Russell 2000 stocks to buy according to Wall Street analysts. While we acknowledge the potential of CPRX, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CPRX but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.