The biotechnology industry has expanded as a result of genetic engineering breakthroughs, data analytics, rising demand, and technological advancements. So, quality biotech stock Biogen Inc. (BIIB) could be worth buying. However, Moderna, Inc. (MRNA) is best avoided, considering its weak fundamentals.
Before delving deeper into the fundamentals of these stocks, let’s discuss what’s happening in the biotech industry.
The biotech industry is expected to maintain its growth as medical technology advances and demand for innovative healthcare solutions grows, particularly in pharmaceuticals, agriculture, and diagnostics.
The global Biotechnology market is expected to reach $1.10 trillion by 2030 at a CAGR of 8.6%. The biotechnology market is expanding rapidly as a result of rising demand for personalized medicine, genetic engineering advancements, and innovative healthcare solutions for chronic diseases.
Moreover, according to Data Horizzon Research, the AI in biotechnology market share will grow at a 29.7% CAGR until 2032. Investors’ interest in biotech stocks is evident as the SPDR Series Trust SPDR S&P Biotech ETF (XBI) gained 39.1% over the past three months.
However, the biotech industry is confronting several challenges that are impeding its expansion and progress. One significant problem is the high cost of R&D, which makes it difficult for smaller companies to compete with larger ones. Also, there is a lack of regulatory clarity and consistency, creating uncertainty for investors and slowing the clearance process for new products.
Let us dive deeper into the fundamentals of the featured stocks:
Stock to Buy:
Biogen Inc. (BIIB)
BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases. It offers TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI, and FAMPYRA for treating multiple sclerosis; SPINRAZA for spinal muscular atrophy; ADUHELM for treating Alzheimer’s; and FUMADERM for the treatment of severe plaque psoriasis.
BIIB’s trailing-12-month EBITDA margin of 25.38% is 389.3% higher than the industry average of 5.19%. Its trailing-12-month gross profit margin of 75.12% is 31.8% higher than the industry average of 57%.
BIIB’s net income came in at $2.39 billion for the fourth quarter that ended December 31, 2023. Moreover, its net income and EPS came in at $249.70 million and $1.71. Its total assets came in at $26.84 billion for the period ended December 31, 2023, compared to $24.55 billion for the period ended December 31, 2022.
The consensus revenue estimate of $9.66 billion for the year ending December 2024. Its EPS is expected to grow 3.1% year-over-year to $15.45 for the same period. It surpassed EPS estimates in all four trailing quarters.
BIIB’s shares have gained 8.9% over the past three months to close the last trading session at $244.74.
BIIB’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, equating to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
BIIB also has a B grade for Value and Sentiment. It is ranked #33 out of 353 stocks in the Biotech industry. Click here for the additional POWR Ratings for Growth, Stability, Momentum and Quality for BIIB.
Stock to Sell:
Moderna, Inc. (MRNA)
MRNA is a biotech company that discovers, develops, and commercializes messenger RNA therapeutics and vaccines for treating infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases in the United States, Europe, and internationally.
MRNA’s trailing-12-month EBITDA margin of negative 23.75% compared to the industry average of 5.19%. Its trailing-12-month EBIT margin of negative 29.22% compared to the industry average of 0.07%.
MRNA’s total revenue for the third quarter ended September 30, 2023, decreased 45.6% year-over-year to $1.83 billion. Its loss from operation came in at $2.01 billion, compared to an income from operation of $1.17 billion in the prior-year quarter. The company reported a net loss and net loss per share of $3.63 billion and $9.53, respectively.
Street expects MRNA’s revenue to decrease 32.7% year-over-year to $4.40 billion for the year ending December 2024. Its EPS is expected to come in at negative $6.50 for the same period. The stock has lost 47.4% over the past year to close the last trading session at $89.
MRNA’s has an overall D rating, equating to a Sell in our POWR Ratings system.
It also has an F grade for Stability and a D for Growth, Sentiment and Momentum. It is ranked #201 in the same industry. Beyond what is stated above, we’ve also rated MRNA for Value and Quality. Get all MRNA ratings here.
What To Do Next?
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BIIB shares were trading at $229.00 per share on Tuesday afternoon, down $15.74 (-6.43%). Year-to-date, BIIB has declined -11.50%, versus a 4.21% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
Moderna (MRNA) and Biogen (BIIB) - Are There Upsides Left in These Biotech Stocks? StockNews.com
