Big Rallies Brewing? 3 Analyst Favorites to Watch Closely

The article identifies SkyWater Technology (SKYT), Emergent BioSolutions (EBS), and Backblaze (BLZE) as companies positioned for continued growth following recent stock rallies, underpinned by promising fundamentals and strong analyst sentiment. SkyWater's shares surged 30% after its acquisition of Fab 25, projected to add $300 million in annual revenue and align with U.S. onshore semiconductor mandates, despite Q2 losses. Emergent BioSolutions, up 21%, demonstrated improved EPS through NARCAN sales and cost optimization, securing new international contracts. Cloud provider Backblaze, which saw a 48% gain, reported 16% revenue growth driven by AI demand and improving EBITDA margins, despite wider GAAP losses. All three firms hold unanimous 'Buy' ratings from covering analysts, signaling potential for further upside.

Analysis

The report highlights three companies—SkyWater Technology (SKYT), Emergent BioSolutions (EBS), and Backblaze (BLZE)—that have experienced significant recent stock price appreciation, with one-month gains of approximately 30%, 21%, and 48% respectively. Despite mixed recent earnings reports, each firm presents a compelling forward-looking catalyst that underpins unanimous 'Buy' ratings from covering analysts. For SkyWater, a 37% year-over-year revenue drop and wider losses in Q2 2025 were overshadowed by the acquisition of the Fab 25 facility, which is projected to add over $300 million in annual revenue and strategically positions the company to capitalize on U.S. semiconductor onshoring regulations. Emergent BioSolutions demonstrated successful operational restructuring; despite a revenue miss, the company beat EPS estimates by 42 cents per share through strong NARCAN sales and cost optimization, enabling a $50 million share repurchase program and securing a $65 million international contract. Backblaze is riding the secular trend of AI-driven demand, reporting a 16% YOY revenue increase and a 29% surge in storage revenue. While GAAP losses widened and free cash flow remains negative, improving adjusted EBITDA margins and the successful launch of its B2 OverDrive platform suggest a strong growth trajectory.

Key Decisions for Investors

• Given the significant recent rallies in all three stocks, investors should consider the potential for near-term volatility and might look for consolidation or a pullback before initiating new positions.
• For SkyWater and Backblaze, execution risk is paramount; monitor SKYT’s upcoming earnings for the initial revenue and EBITDA contribution from Fab 25, and scrutinize BLZE's progress toward achieving positive free cash flow.
• For Emergent BioSolutions, focus on the sustainability of its margin improvements and the continuation of international contract wins, as these are critical validations of its successful turnaround strategy and cost-control initiatives.