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Ionis Pharmaceuticals’ Valuation as of March 27, 2018

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Ionis Pharmaceuticals’ valuation

Ionis Pharmaceuticals (IONS) is one of the leading biopharmaceutical companies focused on discovering, developing, and commercializing RNA[1. ribonucleic acid]-targeted therapies. It reported a 7.5% growth in revenues to $172.3 million in 4Q17 compared to $160.3 million in 4Q16.

The above chart compares the company’s revenues and EPS (earnings per share) since 1Q17.

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Forward EV-to-revenue multiples

Since Ionis Pharmaceuticals reported a net loss in 4Q17, we’ll consider a forward EV[2. enterprise value]-to-revenue multiple for its valuation.

As of March 27, 2018, the company is trading at a forward EV-to-revenue multiple of 9.2x compared to the industry average of 4.2x. Pharmaceutical companies Incyte (INCY), Celgene (CELG), and BioMarin Pharmaceutical (BMRN) are trading at forward EV-to-revenue multiples of 9.2x, 4.0x, and 8.9x, respectively.

Analyst recommendations

As we’ve already seen, Ionis stock has risen 25.7% over the last 12 months as of March 27, 2018. Wall Street analysts estimate that the stock might increase 25.1% over the next 12 months. Analyst recommendations show a 12-month target price of $61.27 per share compared to the last target price of $48.99 per share as of March 26, 2018. Of the 13 analysts tracking Ionis Pharmaceuticals, five have recommended a “buy,” six have recommended a “hold,” and two have recommended a “sell.” The consensus rating for Ionis stock is 2.8, which is a “moderate buy” for value investors.

The VanEck Vectors Biotech ETF (BBH) holds 1.3% of its total investments in Ionis Pharmaceuticals (IONS), 4.3% in Incyte (INCY), 7.1% in Celgene (CELG), and 4.4% in BioMarin Pharmaceutical (BMRN).

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