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Incyte’s Valuations on July 6

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Updated

Incyte Corporation

According to Incyte Corporation (INCY), the firm is a “Wilmington, Delaware-based biopharmaceutical company focused on the discovery, development, and commercialization of proprietary therapeutics.”

Incyte’s products serve the unmet medical needs in oncology and other disease categories. The company reported revenues of $382.3 million during the first quarter, a marginal decrease in YoY (year-over-year) revenues compared to $384.1 million during the first quarter of 2017.

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The chart above compares the revenues and EPS for Incyte since the first quarter of 2017 and its estimates for the second quarter. Wall Street analysts expect Incyte to post EPS of $0.24 on revenues of $473.9 million during the second quarter, a 45.2% increase in YoY revenues compared to the second quarter of 2017.

Forward PE multiple

On July 6, Incyte (INCY) was trading at a forward PE (price-to-earnings) multiple of 37.1x compared to the industry average of ~13.3x. The company is trading at a significantly higher PE multiple than its peers. 

Among its peers, Regeneron Pharmaceuticals (REGN), Amgen (AMGN), and Vertex Pharmaceuticals (VRTX) are trading at PE multiples of 17.6x, 13.4x, and 41.5x, respectively.

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Forward EV-to-EBITDA multiple

On a capital structure–neutral and excess cash–adjusted basis, Incyte (INCY) trades at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of ~25.4x. This multiple is significantly higher than the industry average of ~9.7x on May 25. 

Among Incyte’s competitors, Regeneron Pharmaceuticals (REGN), Amgen (AMGN), and Vertex Pharmaceuticals (VRTX) are trading at forward EV-to-EBITDA multiples of 13.0x, 9.7x, and 37.1x, respectively.

Forward EV-to-revenue multiple

On July 6, Incyte traded at a forward EV-to-revenue multiple of 6.8x compared to the industry average of 4.2x. Among its competitors, Vertex Pharmaceuticals (VRTX) and Regeneron Pharmaceuticals (REGN) are trading at forward EV-to-revenue multiples of ~13.0x and 5.4x, respectively.

The First Trust NYSE Arca Biotechnology ETF (FBT) holds 3.1% of its total investments in Incyte (INCY), 3.4% in Amgen (AMGN), 3.6% in Regeneron Pharmaceuticals (REGN), and 3.3% in Vertex Pharmaceuticals (VRTX).

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