The biotech industry is growing with breakthrough developments and increased demand. Moreover, biotech sector enjoys inelastic demand for its products and services and tends to be relatively stable amid economic uncertainties. So, investors looking for quality biotech stocks can consider buying Genmab A/S (GMAB) and Exelixis, Inc. (EXEL).
The Biden administration’s National Biotechnology and Biomanufacturing Initiative is expected to boost the industry’s long-term growth.
Moreover, the global biotechnology market is expanding with increasing number of chronic illnesses such as diabetes and cancer. Furthermore, the strategic alliances of various biotech organizations are expected to boost the market.
The global biotechnology market is estimated to grow at a CAGR of 14.2% until 2030. Investors’ interest in biotech stocks is evident from the SPDR Series Trust SPDR S&P Biotech ETF (XBI) gained 4.6% over the past six months.
Let’s delve deeper into the fundamentals of the stocks.
Genmab A/S (GMAB)
Headquartered in Copenhagen, Denmark, GMAB, develops antibody therapeutics for the treatment of cancer and other diseases primarily in Denmark.
On April, 17, 2023, GMAB and argenx (ARGX) entered into a collaborative agreement to discover, develop, and market new therapeutic antibodies with applications in immunology and cancer therapeutic domains.
This should help the companies to improve their expertise and maximize their chances of developing innovative therapeutic antibodies for autoimmunity or cancer.
GMAB’s forward Price/Book multiple of 0.55 is 79.5% lower than the industry average of 2.68.
GMAB’s trailing-12-month gross profit margin of 100% is 79.1% higher than the industry average of 55.85%. Its trailing-12-month EBITDA margin of 43.45% is significantly higher than the industry average of 2.19%.
GMAB’s revenue increased 34.7% year-over-year to DKK 2.85 billion ($413.74 million) for the fiscal first quarter that ended March 31, 2023.
The company’s total assets and cash and cash equivalents amounted to DKK30.39 billion and DKK12.29 billion ($4.41 billion and $1.78 billion) for the period that ended March 31, 2023, compared to DKK30.29 billion and DKK9.89 billion ($4.39 billion and $1.43 billion) for the period ended December 31, 2022, respectively.
Analysts expect GMAB’s revenue to increase 17.5% year-over-year to $2.71 billion in 2024. Its EPS is expected to grow 38.4% year-over-year to $1.43 in 2024. GMAB’s stock has gained 13.2% over the past nine months to close its last trading session at $40.68.
GMAB’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GMAB has a B grade for Growth and Value. Within the Biotech industry, it is ranked #27 out of 378 stocks. Click here for the additional POWR Ratings for Momentum, Sentiment, Stability, and Quality for GMAB.
Exelixis, Inc. (EXEL)
EXEL is an oncology-focused biotechnology company focused on discovering, developing, and commercializing new medicines to treat cancers. The company’s platform also provides therapies to cancer patients with additional treatment options.
EXEL’s forward EV/Sales multiple of 2.91 is 21.8% lower than the industry average of 3.72. Its trailing-12-month Price/Sales multiple of 3.53 is 14.9% lower than the industry average of 4.15.
EXEL’s trailing-12-month asset turnover ratio of 0.57x is 64.28% higher than the 0.35x industry average. Its trailing-12-month EBITDA margin of 2.19% is 368% higher than the 10.24% industry average.
For the fiscal first quarter that ended March 31, 2023, EXEL’s total revenues increased 14.8% year-over-year to $408.79 million. The company’s net product revenues rose 17.1% over the prior-year period to $363.40 million. Its licence revenue came in at $38.29 million, up 19.4% year-over-year.
Street expects EXEL’s revenue to increase 13% year-over-year to $1.82 billion in 2023. Its EPS is expected to grow at 11.7% year-over-year to $0.63 in 2023. It surpassed EPS estimates in three of four trailing quarters. The stock has gained 16.7% over the past six months to close its last trading session at $19.73.
EXEL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #18 in the same industry. It has a B for Value, and Quality. To see additional EXEL’s rating for Stability, Sentiment, Momentum and Growth, click here.
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GMAB shares were trading at $41.23 per share on Friday afternoon, up $0.55 (+1.35%). Year-to-date, GMAB has declined -2.71%, versus a 9.85% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...
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|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|GMAB||Get Rating||Get Rating||Get Rating|
|EXEL||Get Rating||Get Rating||Get Rating|
|ARGX||Get Rating||Get Rating||Get Rating|