Amid persistent demand and cutting-edge developments, the biotech industry has evolved and flourished over the past few decades. As the industry continues to thrive, fundamentally strong biotech stocks Gilead Sciences, Inc. (GILD), Incyte Corporation (INCY), and Taisho Pharmaceutical Holdings Co., Ltd. (TAIPY) could soar high in the coming months.
Despite the uncertain economic backdrop, the biotech industry should remain steady due to the inelastic demand for healthcare products and services. Additionally, attractive government initiatives, such as President Biden’s National Biotechnology and Biomanufacturing Initiative, have the potential to boost the industry’s growth.
According to Data Bridge Market Research, the biotechnology market is expected to grow at a CAGR of 29% until 2030.
Investors’ interest in the biotech sector is evident from the iShares Nasdaq Biotechnology Index Fund’s (IBB) 5.9% returns over the past six months and 10.3% over the past nine months.
So, I think now is the best time to scoop up the under $100 biotech stocks mentioned above.
Gilead Sciences, Inc. (GILD)
Biopharmaceutical company GILD discovers, develops, and commercializes medicines for unmet medical needs in the United States, Europe, and internationally for over three decades.
On February 3, 2023, According to GILD, the FDA authorized Trodelvy to treat metastatic breast cancer in adult patients receiving endocrine-based therapy and at least two additional systemic medicines.
GILD also stated last month that the European Medicines Agency (EMA) approved Trodelvy’s Marketing Authorization Application (MAA) to treat adult patients with previously treated HR+/HER2-metastatic breast cancer. This is likely to expand patient access to Trodelvy across the EU.
GILD’s forward non-GAAP P/E of 11.67x is 41.9% lower than the industry average of 20.08x.
GILD’s trailing-12-month EBIT margin of 40.23% is higher than the negative 1.10% industry average, while its trailing-12-month gross profit margin of 79.26% is 41.8% higher than the industry average of 55.89%.
GILD’s total revenues came in at $7.39 billion for the fourth quarter that ended December 31, 2022, up 2% year-over-year. Its non-GAAP net income attributable to GILD and non-GAAP EPS came in at $2.11 billion and $1.67, up 143.2% and 142% year-over-year, respectively.
Analysts expect GILD’s revenue to increase 2% year-over-year to $27.24 billion in 2024. Its EPS is expected to grow 5.3% year-over-year to $7.18 in 2024. It surpassed EPS estimates in all four trailing quarters. GILD’s shares have gained 30% over the past year to close the last trading session at $79.62.
GILD’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GILD has an A grade for Growth and Value and a B for Sentiment and Quality. Within the Biotech industry, it is ranked first among 398 stocks. Click here for the additional POWR Ratings for Stability and Momentum for GILD.
Incyte Corporation (INCY)
Biopharmaceutical company INCY focuses on discovering, developing, and commercializing proprietary therapeutics in the United States and internationally. Its product portfolio includes JAKAFI, PEMAZYRE, and ICLUSIG.
INCY’s forward EV/Sales of 3.73x is 3.3% lower than the industry average of 3.86x.
INCY’s trailing-12-month ROCE of 8.37% is higher than the industry average of negative 40.10%. Its trailing-12-month ROTA of 5.83% is higher than the industry average of 30.71%.
For the fourth quarter ended December 31, 2022, INCY’s total revenues came in at $926.70 million, up 12.1% year-over-year. Its product revenues came in at $764.22 million, up 17.9% year-over-year. Its non-GAAP net income and non-GAAP EPS came in at $139.66 million and $0.62, up 518.9% and 520% year-over-year, respectively.
INCY’s revenue is expected to rise 10.9% year-over-year to $3.77 billion in 2023. Its EPS is estimated to grow 37.1% year-over-year to $3.81 in 2023. Over the past year, the stock has gained 11.1% to close the last trading session at $77.31.
It’s no surprise that INCY has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Quality and a B for Growth and Value. It is ranked #5 in the same industry.
Beyond what is stated above, we’ve also rated INCY for Growth and Momentum. Get all INCY ratings here.
Taisho Pharmaceutical Holdings Co., Ltd. (TAIPY)
Based in Tokyo, Japan, TAIPY and its subsidiaries research, develop, manufacture, market, distribute, and sell over-the-counter (OTC) drugs and prescription pharmaceutical products in Japan and internationally. Its segments are the Self-Medication Operation Group and the Prescription Pharmaceutical Operation Group.
TAIPY’s forward EV/Sales of 0.63x is 83.7% lower than the industry average of 3.86x, and its forward Price/Sales of 1.45x is 67.2% lower than the industry average of 4.41x.
TAIPY’s trailing-12-month gross profit margin of 60.17% is 7.7% higher than the industry average of 55.89%. Its trailing-12-month EBITDA margin of 17.10% is 404.7% higher than the industry average of 3.39%.
For the nine months that ended December 31, 2022, TAIPY’s net sales came in at ¥222.67 billion ($1.64 billion), up 13.8% year-over-year. Its gross profit increased 11.6% year-over-year to ¥136.36 billion ($100 million). Also, its profit came in at ¥20.90 billion ($15 million), representing an increase of 132.9% year-over-year.
Over the past six months, the stock has gained 5.6% to close the last trading session at $9.80.
TAIPY has an overall A rating, translating to a Strong Buy rating in our POWR Ratings system.
It has an A grade for Stability and a B for Growth and Value. It is ranked #6 in the same industry. For additional POWR Ratings for TAIPY for Momentum, Sentiment, and Quality, click here.
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GILD shares were trading at $79.79 per share on Friday morning, up $0.17 (+0.21%). Year-to-date, GILD has declined -7.06%, versus a 4.59% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
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.
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