The biotech industry is growing rapidly with rising investments and breakthrough developments. Moreover, given the sector’s defensive nature, biotech stocks BioNTech SE (BNTX), Acorda Therapeutics, Inc. (ACOR), and Shionogi & Co., Ltd. (SGIOY) might be worth buying now.
The growing presence of personalized medicine and an increasing number of orphan drug formulations are opening new avenues for biotechnology applications and driving the influx of emerging and innovative biotechnology companies, further increasing market revenue.
According to Data Bridge Market Research, the biotechnology market is expected to grow at a CAGR of 29% to $10.13 trillion by 2030.
Raj Lala, president, and CEO of Evolve Funds, told INN that he expects healthcare stocks to remain resilient to current market challenges this year. Also, whether the US will enter a recession is up for debate, but the fund executive said that even if it does, biotech companies will “continue to perform well” since investors tend to prefer “defensive sectors.”
“Healthcare stocks are perceived to be stable companies that offer products people need even during a recession,” Lala explained.
Let’s discuss the stocks mentioned above in detail:
BioNTech SE (BNTX)
Based in Mainz, Germany, BNTX is a a biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases.
Its trailing-12-month asset turnover ratio of 0.89x is 150.3% higher than the 0.35x industry average. Its trailing-12-month gross profit margin of 82.70% is 47.9% higher than the 55.90% industry average.
During the fiscal first quarter ended March 31, 2023, BNTX’s total revenues come in at €1.28 billion ($1.39 billion). Net profit come in at €502.2 million ($545.85 million), while its earnings per share came in at €2.05.
BNTX’s revenue is expected to come in at $673.93 million for the fiscal second quarter ending June 2023. Also, it has surpassed revenue and EPS estimates in three of the trailing four quarters, which is impressive.
Shares of BNTX have gained 2.53% intraday to close the last trading session at $107.90.
BNTX’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value and a B in Sentiment and Quality. It is ranked #24 out of 374 stocks in the Biotech industry.
Beyond what is stated above, we’ve also rated BNTX for Growth, Momentum, and Stability. Get all BNTX ratings here.
Acorda Therapeutics, Inc. (ACOR)
Headquartered in Pearl River, New York, ACOR is a biopharmaceutical company that develops and commercializes therapies for neurological disorders in the United States.
Its trailing-12-month gross profit margin of 71.76% is 28.4% higher than the 55.90% industry average.
ACOR’s net product revenues rose marginally year-over-year to $18.72 million in the fiscal first quarter that ended March 31, 2023. Net loss decreased 31.4% year-over-year to $16.82 million.
Also, it has surpassed revenue estimates in each of the trailing four quarters.
The stock has gained 33.9% over the past nine months to close the last trading session at $0.63.
ACOR’s robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
ACOR has a B grade for Value and Quality. It is ranked #18 in the same industry.
Click here to see the additional POWR Ratings for ACOR (Growth, Momentum, Stability, and Sentiment).
Shionogi & Co., Ltd. (SGIOY)
Headquartered in Osaka, Japan, SGIOY engages in the research, development, manufacture, and distribution of pharmaceuticals, diagnostic reagents, and medical devices in Japan.
Its trailing-12-month EBITDA margin of 38.94% is significantly higher than the 1.84% industry average. Its trailing-12-month gross profit margin of 85.41% is 52.8% higher than the 55.90% industry average.
SGIOY’s revenue increased 27.3% year-over-year to ¥426.68 billion ($3.14 billion) in the fiscal year that ended March 31, 2023. Also, profit attributable to owners of parent increased 62% year-over-year to ¥184.97 billion ($1.36 billion), and EPS increased 64% year-over-year to ¥621.10.
SGIOY’s revenue is expected to increase 12.7% year-over-year to $3.10 billion for the fiscal year ending March 2024. The company’s EPS for the same quarter is expected to come in at $0.95. Also, it has surpassed revenue estimates in each of the trailing four quarters.
SGIOY gained marginally intraday to close its last trading session at $11.39.
SGIOY’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
SGIOY also has a B grade for Value and Quality. It is ranked #23 in the same industry.
For additional ratings for SGIOY’s Growth, Momentum, Stability, and Sentiment, click here.
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BNTX shares fell $0.40 (-0.37%) in premarket trading Tuesday. Year-to-date, BNTX has declined -28.44%, versus a 8.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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