Long-established in the Drug Manufacturers industry, Biogen Inc (BIIB, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 1.21%, juxtaposed with a three-month change of -4.43%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Biogen Inc.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 7/10
- Growth rank: 3/10
- GF Value rank: 4/10
- Momentum rank: 3/10
Based on the above method, GuruFocus assigned Biogen Inc the GF Score of 69 out of 100, which signals poor future outperformance potential.
Company Overview: Biogen Inc
Biogen Inc, with a market cap of $19.2 billion and sales of $9.8 billion, operates with an operating margin of 23.17%. The company was formed through the merger of Biogen and Idec in 2003, combining forces to market Biogen's multiple sclerosis drug Avonex and Idec's cancer drug Rituxan. Today, Rituxan and next-generation antibody Gazyva (oncology) and Ocrevus (multiple sclerosis) are marketed via a collaboration with Roche. Biogen markets several multiple sclerosis drugs including Plegridy, Tysabri, Tecfidera, and Vumerity. Biogen's newer products include Spinraza (SMA, with partner Ionis), Leqembi (Alzheimers, with partner Eisai), Skyclarys (Friedreich's Ataxia, Reata), Zurzuvae (postpartum depression, Sage), and Qalsody (ALS, Ionis). Biogen has several drug candidates in phase 3 trials in neurology, immunology, and rare diseases.
Growth Prospects and Challenges
A lack of significant growth is another area where Biogen Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -3.3% per year over the past three years, which underperforms worse than 73.3% of 914 companies in the Drug Manufacturers industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, Biogen Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion: Evaluating Biogen Inc's Future
Biogen Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's potential for underperformance. While the company has a strong history and a diverse product portfolio, its current growth challenges and low predictability rank suggest that investors should approach with caution. For those seeking companies with stronger GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
