A Look at Incyte’s Valuation on August 22




Incyte (INCY), a biopharmaceutical company, is focused on the discovery, development, and commercialization of various products to cater to unmet medical needs in oncology and the treatment of other diseases.

Incyte reported GAAP (generally accepted accounting principles) revenue of $521.5 million in the second quarter, a 59.7% rise year-over-year compared to $326.4 million in the second quarter of 2017.

The chart above compares Incyte’s revenues and EPS since the first quarter of 2017.

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Forward PE

On August 22, Incyte was trading at a forward PE multiple of 38.1x compared to the industry average of ~13.9x. The company is trading at a much higher PE than its peers Ionis Pharmaceuticals (IONS) and Vertex Pharmaceuticals (VRTX), which are trading at PEs of 297.4x and 40.2x, respectively.

Forward EV-to-EBITDA

On a capital-structure-neutral and excess-cash-adjusted basis, Incyte is currently trading at a forward EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~26.5x, much higher than the industry average of ~10.1x, as of August 22. Its competitor Vertex Pharmaceuticals is trading at a forward EV-to-EBITDA multiple of 35.5x.

Forward EV-to-revenue

On August 22, Incyte was trading at a forward EV-to-revenue multiple of 6.9x compared to the industry average of 5.0x. Vertex Pharmaceuticals, Sarepta Therapeutics (SRPT), and Ionis Pharmaceuticals were trading at forward EV-to-revenue multiples of ~12.7x, 21.0x, and 7.3x, respectively.

The VanEck Vectors Biotech ETF (BBH) holds 4.2% of its total investments in Incyte, 1.6% in Ionis Pharmaceuticals, and 5.6% in Vertex Pharmaceuticals.


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