We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: Aquestive Therapeutics, Inc. (NASDAQ: AQST)
Today’s penny stock pick is the pharmaceutical company, Aquestive Therapeutics, Inc. (NASDAQ: AQST).
Aquestive Therapeutics, Inc. operates as a pharmaceutical company in the United States and internationally. It offers Libervant, a buccal soluble film formulation of diazepam for the treatment of seizures; Suboxone, a sublingual film formulation of buprenorphine and naloxone for the treatment of opioid dependence; Sympazan, an oral soluble film formulation of clobazam for the treatment of lennox-gastaut syndrome; KYNMOBI a sublingual film formulation of apomorphine for the treatment of episodic off-periods in Parkinson’s disease; and Azstarys, a once-daily product for the treatment of attention deficit hyperactivity disorder.
The company’s proprietary pipeline products include Anaphylm, an epinephrine sublingual film, which is in phase 3 clinical trial for the emergency treatment of allergic reactions, including anaphylaxis; and AQST-108, a topical gel that is in phase 2 clinical trial for the treatment of alopecia areata. In addition, it develops PharmFilm technology for patients suffering from certain central nervous system disorders; and Adrenaverse, an epinephrine prodrug platform.
Website: https://www.aquestive.com/
Latest 10-K report: https://investors.aquestive.com/static-files/c5f221b7-29c2-4149-9d3d-6567edb9ed41
Analyst Consensus: As per TipRanks Analytics, based on 8 Wall Street analysts offering 12-month price targets for AQST in the last 3 months, the stock has an average price target of $9.17, which is nearly 124% upside from current levels.
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The company announced that the FDA issued a Complete Response Letter (CRL) for Anaphylm on January 30. It was noted that the FDA’s concerns were limited to human factors (usability) and a supportive PK study, rather than fundamental safety or efficacy issues.
- Hedge Funds Increased Holdings by 1.0M Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
- Needle-free epinephrine addresses a large anaphylaxis market (EpiPen dominance but patient preference for non-injectable). Patent extensions to 2037 add protection.
- AQST is advancing AQST-108, a topically delivered epinephrine prodrug gel, as a potential treatment for alopecia areata.
- Rumors that the company may request a Type A meeting with FDA and aim to resubmit as early as Q3 2026, potentially seeking rapid review of Anaphylm.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple color lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out from the falling wedge pattern with high volume. Once the stock breaks out of the falling wedge pattern, it could move higher.
AQST – Daily Chart
#2 Bullish Stoch: The %K line of the stochastic is above the %D line, and has also moved higher from oversold levels, indicating possible bullishness.
#3 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#4 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink color dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 200-week SMA, indicating that the bulls are gaining control.
AQST – Weekly Chart
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for AQST is above the price of $4.30.
Target Prices: Our first target is $5.30. If it closes above that level, the second target price is $6.00.
Stop Loss: To limit risk, place a stop loss at $3.80. Note that the stop loss is on a closing basis.
Our target potential upside is 23% to 39%.
For a risk of $0.50, our first target reward is $1.00, and the second target reward is $1.70. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses and has an accumulated deficit of $363.2 million as of December 31, 2024.
AQST – Consolidated Statements of Operations
- The company had previously anticipated a potential Q1 2026 launch for Anaphylm. The new timeline, involving further studies, makes a 2027 market launch more likely, stalling the revenue ramp for this key value drive.
- There are shareholder investigations announced by law firms post-CRL.
- Aquestive Therapeutics faces significant litigation risks, including an ongoing California state court case with Neurelis alleging unfair competition, defamation, and trade libel related to competitive actions, with summary judgment hearings held in 2025 and a trial scheduled for July 2025, as well as an appealed federal court ruling (from February 2025) that vacated the FDA’s approval of Libervant for young pediatric patients due to orphan drug exclusivity challenges brought by Neurelis. The company also remains exposed to product liability claims in U.S. multidistrict and Canadian class action litigations alleging dental injuries from Suboxone Sublingual Film.
- Despite being a loss-making company, the executives are being given significant compensation.
AQST – Executive Compensation
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!
Happy Trading!
Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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