In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amgen AMGN and its primary competitors in the Biotechnology industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Amgen Background
Amgen is a leader in biotechnology-based human therapeutics, with historical expertise in renal disease and cancer supportive-care products. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006 and markets bone-strengthening drug Prolia/Xgeva (approved 2010) and Evenity (2019). The acquisition of Onyx bolstered the firm's therapeutic oncology portfolio with Kyprolis. Recent launches include Repatha (cholesterol-lowering), Aimovig (migraine), Lumakras (lung cancer), and Tezspire (asthma). Amgen's biosimilar portfolio includes Mvasi (biosimilar Avastin), Kanjinti (biosimilar Herceptin), and Amjevita (biosimilar Humira).
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amgen Inc | 19.21 | 22.48 | 5.76 | 22.74% | $3.26 | $5.17 | 5.94% |
| AbbVie Inc | 30.51 | 20.34 | 4.70 | 15.4% | $5.42 | $9.62 | -4.92% |
| Gilead Sciences Inc | 17.65 | 4.52 | 3.54 | 4.96% | $2.5 | $5.16 | 5.42% |
| Vertex Pharmaceuticals Inc | 28.44 | 6.14 | 10.07 | 6.12% | $1.21 | $2.18 | 13.52% |
| Regeneron Pharmaceuticals Inc | 22.16 | 3.79 | 7.52 | 4.08% | $1.2 | $2.75 | 10.53% |
| Moderna Inc | 34.99 | 2.26 | 3.79 | -7.71% | $-1.64 | $-0.41 | -93.08% |
| Biogen Inc | 14.23 | 2.61 | 3.80 | 4.19% | $0.87 | $1.86 | -5.14% |
| BioNTech SE | 5.68 | 1.24 | 2.71 | -0.95% | $-0.38 | $-0.37 | -94.75% |
| Biomarin Pharmaceutical Inc | 166.42 | 3.40 | 7.39 | 1.19% | $0.1 | $0.47 | 11.52% |
| Incyte Corp | 34.71 | 2.67 | 3.62 | 4.42% | $0.3 | $0.89 | 4.74% |
| United Therapeutics Corp | 13.16 | 2.01 | 5.43 | 4.92% | $0.36 | $0.53 | 27.76% |
| Neurocrine Biosciences Inc | 62.49 | 5.86 | 6.74 | 5.4% | $0.13 | $0.44 | 19.7% |
| Exelixis Inc | 42.48 | 2.68 | 4.04 | 3.19% | $0.08 | $0.45 | 12.02% |
| Grifols SA | 47.84 | 0.95 | 0.86 | 1.02% | $0.25 | $0.62 | 7.81% |
| Average | 40.06 | 4.5 | 4.94 | 3.56% | $0.8 | $1.86 | -6.53% |
By thoroughly analyzing Amgen, we can discern the following trends:
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The Price to Earnings ratio of 19.21 is 0.48x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 22.48, which is 5.0x the industry average, Amgen might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 5.76, which is 1.17x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 22.74% is 19.18% above the industry average, highlighting efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.26 Billion, which is 4.07x above the industry average, implying stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $5.17 Billion, which indicates 2.78x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 5.94% exceeds the industry average of -6.53%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When comparing Amgen with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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Among its top 4 peers, Amgen has a higher debt-to-equity ratio of 9.08.
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This implies a greater reliance on debt financing, which can expose the company to higher financial risk and potential challenges.
Key Takeaways
Amgen's low PE ratio suggests that it is undervalued compared to its peers in the Biotechnology industry. The high PB and PS ratios indicate that the company's stock price may be overvalued relative to its book value and sales. On the other hand, Amgen's high ROE, EBITDA, gross profit, and revenue growth suggest that the company is performing well and generating strong returns. Overall, Amgen's valuation analysis suggests a mixed picture, with potential undervaluation in terms of PE ratio but potential overvaluation in terms of PB and PS ratios. Additionally, the company's strong financial performance indicators indicate positive prospects for future growth.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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