This 5p penny stock is crushing the stock market in 2025
The global stock market has been enjoying a solid run in 2025. Both the FTSE 100 and the S&P 500 have climbed by around 10% so far this year, boosted by strong corporate earnings, surging demand for artificial intelligence (AI), and a boost in aerospace and defence budgets.Â
For many investors, it has been a productive start to the year.
But one tiny penny stock is making those gains look pedestrian. Shield Therapeutics (LSE: STX), a £57.8m micro-cap pharmaceutical company, is up a staggering 108% year to date. Thatâs more than 10 times the growth of the broader market!
However, massive price jumps are not uncommon for micro-cap stocks. With a relatively small number of shareholders and limited liquidity, one small investment could make a big difference.
So I decided to find out if the gains are warranted.
A niche pharma stock
Shield is a speciality pharmaceutical firm focused on treating iron deficiency, with its lead product, Accrufer, already on the market. At the time of writing, the shares trade at just 5.6p — a remarkable leap from a low of 2p earlier this year.
Looking further back, the picture is less rosy. The share price has tumbled around 96% from its all-time high roughly five years ago. Since its inception in 2008, it has experienced several sharp rallies, including a climb from 28p to £1.84 in 2019.
But now, there are signs the business could be gearing up for another chapter of growth.
The company remains loss-making, but it is moving in the right direction. Its latest results showed a reduced loss of £21.3m in 2024, down from £40m the year before. Revenue surged 139% year on year, while earnings per share (EPS) improved from -4p to -2p.
Thatâs not profitability yet, but it is progress.
A look under the bonnet
Shieldâs balance sheet shows around £21m in debt against £45.9m of assets, with no free cash flow at present. A quick ratio of 0.99 suggests it can barely cover its short-term liabilities, but there isnât much wiggle room.
The company has been active in shoring up its finances. It recently raised £10m in equity funding from its largest shareholder, AOP, and renegotiated a £20m debt facility on more favourable terms. It has also launched a new digital marketing campaign for Accrufer in the US, where it sees significant growth potential.
Managementâs ambition is to become cash flow positive by the end of 2025.
The verdict
This is an intriguing story: a beaten-down penny stock now sprinting ahead of the broader stock market thanks to surging sales and a renewed growth strategy. The market it operates in is niche but important — iron deficiency remains a widespread and often underdiagnosed condition, especially in certain patient groups.
Still, Shield is a high-risk proposition. It is concentrated on a single flagship product and its financial position leaves little margin for operational missteps. But for investors comfortable with micro-cap volatility and keen on the healthcare sector, it might just be one worth considering.
If the current momentum in sales continues, I think this could be one of 2025âs more memorable stock market comeback stories.
The post This 5p penny stock is crushing the stock market in 2025 appeared first on The Motley Fool UK.
Should you invest £1,000 in Rolls Royce right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls Royce made the list?
More reading
- 10 years of payout hikes! This dividend stock now pays a 9.2% yield to long-term investors
- After hitting a 52-week high, the share price of this FTSE 100 bank’s plunged 8.9%. What’s going on?
- S&P 500 to surge to 7,100? Are we secretly at the start of a new bull market?
- Meet my number 1 passive income investment
- At a P/E of 7, this FTSE 250 stock offers a near-7% yield for investors!
Mark Hartley has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
