Long-established in the Drug Manufacturers industry, Biogen Inc (BIIB, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 0.94%, juxtaposed with a three-month change of -6.41%. 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.
What Is 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.
Understanding Biogen Inc Business
Biogen Inc, with a market capitalization of $19.27 billion, is a prominent player in the pharmaceutical industry. The company reported sales of $9.82 billion and maintains an operating margin of 23.17%. Biogen and Idec merged 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
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 72.87% 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
Biogen Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, suggest a potential for underperformance. The company's challenges in maintaining growth and revenue predictability, coupled with its current market position, indicate that it may struggle to outperform in the future. Investors should carefully consider these factors when evaluating Biogen Inc as a potential investment. For those seeking companies with strong 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.
