A Look at Ionis Pharmaceuticals’ January 2018 Valuation



A look at Ionis Pharmaceuticals

Ionis Pharmaceuticals (IONS), a leading RNA-targeted (ribonucleic acid) therapeutic development company, is focused on developing new best-in-class drugs for life-threatening diseases and marketing its approved products in collaboration with other pharmaceutical companies.

The above chart compares Ionis’s revenues and earnings per share (or EPS) over the last few quarters. Ionis reported revenue of $120.9 million in 3Q17, a 9% rise compared to its revenue of $160.4 million in 3Q16. Further, Wall Street analysts expect revenue of $109.9 million for the company in 4Q17, a 31.5% fall compared to its 4Q16 revenue.

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Forward EV-to-revenue multiple

Preferred valuation multiples include the forward price-to-earnings multiple and the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple. However, as Ionis Pharmaceuticals reported a net loss in 3Q17, we’ll consider its forward EV-to-revenue multiple for its valuation.

On January 5, 2018, the company was trading at a forward EV-to-revenue multiple of 10.7x compared to the industry average of 4.6x. Its competitors Alexion Pharmaceuticals (ALXN), Regeneron Pharmaceuticals (REGN), and Biogen (BIIB) were trading at forward EV-to-revenue multiples of 7.0x, 6.4x, and 5.9x, respectively.

Analysts’ recommendations

On January 5, Ionis’s stock value had risen ~4.3% over the last 12 months. Analysts expect the stock’s value to rise ~14.0% over the next 12 months. Analysts’ recommendations show a 12-month target price of $56.85 per share for the stock compared to its last price of $49.89 per share on January 5, 2017.

Of the 14 analysts tracking Ionis Pharmaceuticals, five analysts recommend “buys,” seven recommend “holds,” and two recommend “sells” on the stock. The consensus rating for Ionis stock is 2.79, a moderate “buy” for value investors.

The First Trust NYSE Arca Biotech ETF (FBT) holds 2.5% of its total investments in Ionis Pharmaceuticals, 2.9% in Alexion Pharmaceuticals, 2.9% in Regeneron Pharmaceuticals, and 3.3% in Biogen.


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