Biogen Inc. (BIIB:NSD) Research Analysis: Stock is overpriced on a free cash flow basis

STA Research
by: STA Research
BIIB stock forecast

Based on the Biogen Inc. stock forecasts from 17 analysts, the average analyst target price for BIIB stock forecast is USD 252.59 over the next 12 months. Biogen Inc.’s average analyst rating is Buy. Stock Target Advisor’s own stock analysis of BIIB stock forecast is Neutral, which is based on 7 positive signals and 7 negative signals. At the last closing, Biogen Inc.’s stock price was USD 214.06. Biogen Inc.’s stock price has changed by -0.21% over the past week, +7.17% over the past month and -34.41% over the last year.

The company Biogen Inc. investigates, creates, produces, and distributes medications to treat neurological and neurodegenerative disorders. Acorda Therapeutics, Inc., Alkermes Pharma Ireland Limited, Denali Therapeutics, Eisai Co., Ltd., Genentech, Inc., Neurimmune SubOne AG, Ionis Pharmaceuticals, Inc., Samsung Bioepis Co., Ltd., Sangamo Therapeutics, Inc., and Sage Therapeutics, Inc. are among the companies with which the company has licence and collaboration agreements. With its corporate headquarters in Cambridge, Massachusetts, Biogen Inc. was established in 1978.

 

What we like:

Underpriced on a cash flow basis

The stock is trading low compared to its peers on a price-to-cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior capital utilization

The company management has delivered a better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered a better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Underpriced on a free cash flow basis

The stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk-adjusted returns

This company is delivering below median risk-adjusted returns to its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above the median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced on a free cash flow basis

The stock is trading high compared to its peers on a price-to-free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector

Disclaimer

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