Long-established in the Drug Manufacturers industry, Biogen Inc (BIIB, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 4.49%, juxtaposed with a three-month change of -12.4%. 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.
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: 6/10
- Profitability rank: 8/10
- Growth rank: 3/10
- GF Value rank: 7/10
- Momentum rank: 1/10
Based on the above method, GuruFocus assigned Biogen Inc a GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Biogen Inc's Business
With a market cap of $31.78 billion and sales of $9.66 billion, Biogen Inc has carved out a significant presence in the pharmaceutical sector. The company boasts an operating margin of 19.5%, reflecting its efficiency in managing expenses relative to revenue. Biogen Inc's history dates back to the merger of Biogen and Idec in 2003, which combined their expertise to market multiple sclerosis and cancer drugs. Today, Biogen Inc markets a range of novel drugs for multiple sclerosis, hemophilia, and other conditions, with several drug candidates in phase 3 trials. The company's collaborations with Roche, Eisai, and others have expanded its reach and fortified its product portfolio.
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 an average of -6.8% per year over the past three years, which underperforms worse than 81.89% of 922 companies in the Drug Manufacturers industry. Stagnating revenues may pose concerns in a fast-evolving market. Over the past five years, Biogen Inc has witnessed a decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA). The three-year growth rate is recorded at -26.7, while the five-year growth rate is at -15.6. These figures underscore potential challenges in the company's profitability. Lastly, Biogen Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Next Steps
Considering Biogen Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While the company has a strong profitability rank, its low growth and momentum ranks raise concerns about its ability to sustain performance in the competitive pharmaceutical industry. Investors should weigh these factors carefully and monitor the company's strategic initiatives to address these challenges. For those seeking to identify more companies with strong GF Scores, GuruFocus Premium members can use 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.
