GURUFOCUS.COM » STOCK LIST » USA » NAS » Biogen Inc (NAS:BIIB) » Definitions » Graham Number
Switch to:

Biogen (NAS:BIIB) Graham Number

: $124.18 (As of Sep. 2022)
View and export this data going back to 1991. Start your Free Trial

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2023-01-28), the stock price of Biogen is $290.08. Biogen's graham number for the quarter that ended in Sep. 2022 was $124.18. Therefore, Biogen's Price to Graham Number ratio for today is 2.34.

The historical rank and industry rank for Biogen's Graham Number or its related term are showing as below:

BIIB' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.43   Med: 3.18   Max: 19.73
Current: 2.34

During the past 13 years, the highest Price to Graham Number ratio of Biogen was 19.73. The lowest was 0.43. And the median was 3.18.

BIIB's Price-to-Graham-Number is ranked worse than
67.14% of 569 companies
in the Drug Manufacturers industry
Industry Median: 1.66 vs BIIB: 2.34

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Biogen Graham Number Historical Data

The historical data trend for Biogen's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Biogen Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 72.11 101.85 128.33 82.39 68.11

Biogen Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 61.07 68.11 70.48 93.77 124.18

Competitive Comparison

For the Drug Manufacturers - General subindustry, Biogen's Graham Number, along with its competitors' market caps and Graham Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Biogen Graham Number Distribution

For the Drug Manufacturers industry and Healthcare sector, Biogen's Graham Number distribution charts can be found below:

* The bar in red indicates where Biogen's Graham Number falls in comparison to its industry or sector. The grey bar indicates the Graham Number's extreme value range as defined by GuruFocus.



Biogen Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Biogen's Graham Number for the fiscal year that ended in Dec. 2021 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*19.822*10.4)
=68.11

Biogen's Graham Number for the quarter that ended in Sep. 2022 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*34.899*19.64)
=124.18

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Biogen  (NAS:BIIB) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Biogen's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2022 )
=290.08/124.18
=2.34

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Biogen Graham Number Related Terms

Thank you for viewing the detailed overview of Biogen's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


Biogen (NAS:BIIB) Business Description

Biogen logo
Address
225 Binney Street, Cambridge, MA, USA, 02142
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 are marketed via a collaboration with Roche. Biogen also markets novel MS drugs Plegridy, Tysabri, Tecfidera, and Vumerity. In Japan, Biogen's MS portfolio is co-promoted by Eisai. Hemophilia therapies Eloctate and Alprolix (partnered with SOBI) were spun off as part of Bioverativ in 2017. Biogen has several drug candidates in phase 3 trials in neurology and neurodegenerative diseases and has launched Spinraza with partner Ionis. Aduhelm was approved as the firm's first Alzheimer's disease therapy in June 2021.
Executives
Murphy Nicole officer: Head of Pharm Ops and Tech BIOGEN INC. 225 BINNEY STREET CAMBRIDGE MA 02142
Izzar Rachid officer: Head of Alzheimer's Disease BIOGEN INC. 225 BINNEY STREET CAMBRIDGE MA 02142
Jones William D /ca/ director
Freire Maria C director C/O ALEXANDRIA REAL ESTATE EQUITIES, INC 26 NORTH EUCLID AVENUE PASADENA CA 91101
Mcdonnell Michael R officer: EVP, Chief Financial Officer C/O IQVIA HOLDINGS INC. 83 WOOSTER HEIGHTS ROAD DANBURY CT 06810
Galdes Alphonse officer: EVP Pharmaceutical Oper & Tech BIOGEN INC. 225 BINNEY ST. CAMBRIDGE MA 02142
Hawkins William A director MEDTRONIC INC 710 MEDTRONIC PKWY, MS LC310 MINNEAPOLIS MN 55432-5604
Mantas Jesus B director BIOGEN INC. 225 BINNEY STREET CAMBRIDGE MA 02142
Kramer Robin officer: VP, Chief Accounting Officer 999 VANDERBILT BEACH ROAD 3RD FLOOR NAPLES FL 34109
Karp Daniel officer: EVP, Corporate Development 225 BINNEY STREET CAMBRIDGE MA 02142
Capello Jeffrey D officer: EVP & Chief Financial Officer BOSTON SCIENTIFIC CORPORATION ONE BOSTON SCIENTIFIC PLACE NATICK MA 01760
Guindo Chirfi officer: EVP Glob. Mkt Acc & Cust Innov C/O BIOGEN INC. 225 BINNEY ST. CAMBRIDGE MA 02142
Gregory Ginger officer: EVP, Human Resources C/O BIOGEN INC. 225 BINNEY ST. CAMBRIDGE MA 02142
Kress Jean-paul officer: EVP Pres Int'l & Global Hd GTO 215 FIRST STREET, SUITE 415 CAMBRIDGE MA 02142
Mckenzie Paul officer: EVP Pharmaceutical Oper & Tech BIOGEN INC. 225 BINNEY ST. CAMBRIDGE MA 02142

Biogen (NAS:BIIB) Headlines

From GuruFocus

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
premium membership