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 1.44%, juxtaposed with a three-month change of -19.79%. 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: 6/10
- Profitability rank: 8/10
- Growth rank: 2/10
- GF Value rank: 8/10
- Momentum rank: 1/10
Based on the above method, GuruFocus assigned Biogen Inc the GF Score of 67 out of 100, which signals poor future outperformance potential.
Company Overview
Biogen Inc, with a market capitalization of $23.59 billion and sales amounting to $9.61 billion, operates with an operating margin of 23.17%. The company was formed through the merger of Biogen and Idec in 2003, combining their efforts to market Biogen's multiple sclerosis drug Avonex and Idec's cancer drug Rituxan. Today, Biogen markets several multiple sclerosis drugs, including Plegridy, Tysabri, Tecfidera, and Vumerity. The company also has newer products like Spinraza for spinal muscular atrophy, Leqembi for Alzheimer's, and others. Biogen continues to develop drug candidates in phase 3 trials across 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 6.8% per year over the past three years, which underperforms worse than 82.39% of 914 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.
Conclusion
Biogen Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, suggest potential underperformance in the future. The company's challenges in maintaining revenue growth and profitability, coupled with a low predictability rank, indicate a need for strategic adjustments to navigate the competitive landscape effectively. Investors should consider these factors when evaluating Biogen Inc's potential for future growth and performance.
GuruFocus Premium members can find more companies with strong GF Scores 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.
