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The pharmaceutical industry is expected to grow with strong demand and government support. Given the industry’s solid long-term outlook, investors should consider buying pharmaceutical stocks Ironwood Pharmaceuticals (IRWD) and Cariditas Therapeutics (CALT). read.
The pharmaceutical industry tends to perform relatively well even under economic pressures, as demand for its products and services is inelastic. Therefore, investors looking for quality pharmaceutical stocks can consider buying Ironwood Pharmaceuticals (IRWD) and Calliditas Therapeutics AB (publisher) (cult).
Statistics from the U.S. pharmaceutical industry show that in the U.S. Capturing 43.72% market share in the global pharmaceutical industry in 2023. And the US is expected to spend $605-635 billion on healthcare by 2025.
The global healthcare market is expected to expand rapidly 21.9% CAGR by 2030.
Additionally, the U.S. generic drug market is expected to reach $110.7 billion by 2028 and is growing rapidly. CAGR 4.1% The number of generic drug approvals across the United States has increased in recent years, aided by the implementation of the FDA’s Drug Competition Action Plan, which aims to remove hurdles faced by generic drug manufacturers. .
Investor interest in pharmaceutical stocks is fueled by the VanEck Vectors Pharmaceutical ETF (PPH) has returned 6.5% over the last 6 months.
Let’s dig deeper into stock fundamentals.
Ironwood Pharmaceuticals (IRWD)
IRWD is a healthcare company focused on the development and commercialization of gastrointestinal (GI) products.
IRWD’s future EV/EBITDA multiple is 4.95, 62.6% lower than the industry average of 13.25. The company’s future EV/EBIT multiple is 4.94, 70.4% lower than the industry average of 16.66.
Last 12 months of IRWD Gross profit margin 88.90% is 59.2% higher than the industry average of 55.85%. His EBITDA margin for the last 12 months was 60.88%, well above the industry average of 2.19%.
For the first quarter of the fiscal year ended March 31, 2023, IRWD’s total revenue was $104.06 million, up 6.7% year-on-year. The company’s Adjusted EBITDA increased 3.7% year-over-year to $60.38 million. Non-GAAP net income and EPS were $45.7 million and $0.25, up 20% and 19% year-over-year, respectively.
Analysts expect IRWD’s revenue to grow 4.5% year-on-year to $429.11 million in 2023. The company’s EPS is expected to grow 10.7% YoY to $1.06 in 2023. IRWD shares edged higher during the day to end the last trading session of 2023. $10.21.
of IRWD power rating reflects this promising outlook. This stock has an overall rating of A, which corresponds to a ‘strong buy’ in our proprietary rating system. POWR Ratings values stocks by 118 different factors, each with its own weighting.
IRWD’s value and quality is A grade, momentum is B.Within Medical – Pharmaceuticals It ranks 16th out of 166 stocks in the industry. click here Additional POWR assessments on IRWD growth, sentiment and stability can be found here.
Calliditas Therapeutics AB (Publisher) (cult)
CALT, headquartered in Stockholm, Sweden, is a commercial-stage specialty pharmaceutical company focused on the identification, development and commercialization of medicines for the treatment of rare diseases, initially focused on kidney and liver diseases. .
CALT’s 4x price/sales over the last 12 months is 2.1% lower than the industry average of 4.09.
CALT’s 12-month asset turnover ratio of 0.60x is 72.1% higher than the industry average of 0.35x. Gross margin for the last 12 months was 97.50%, 74.6% higher than his industry average of 55.85%.
For the first quarter ended March 31, 2023, CALT’s net sales increased by 284.8% year-on-year to SEK 191.35 million ($18.17 million). Gross profit increased by 271.2% year-on-year to 182.32 Swedish kronor ($17.31 million).
The company’s total liquid assets and total assets amounted to SEK 1,296 million and SEK 1,790 million ($115.8 million and $169.83 million) for the period to March 31, 2023. 896.48 million Swedish krona and 1.34 billion Swedish krona ($85.11 million). and $127.64 million) are for the period ended March 31, 2022.
Street expects CALT’s revenue to grow 123.8% year-on-year to $331.49 million in 2024. 2024 EPS is expected to be $2.75. Exceeded EPS expectations in three of the following four quarters. Shares have risen 39.1% over the past six months to close at $21.09.
CALT’s strong fundamentals are reflected in its POWR rating. The overall rating for this stock is ‘B’, which is equivalent to ‘Buy’ in our proprietary rating system.
It ranks 24th in the industry. A grade for growth, B grade for value and momentum.Click to see additional CALT ratings for stability, sentiment and quality here.
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IRWD shares were trading at $10.22 a share Thursday morning, up $0.01 (+0.10%). Year-to-date, IRWD is down -17.51%. In comparison, the benchmark S&P 500 index during the same period rose 9.53%.
About the Author: Rashmi Kumari
Rashmi’s passion for capital markets, wealth management and financial regulatory issues inspired her to pursue a career as an investment analyst. With her Master of Commerce degree, she wants to make complex financial matters easier for individual investors to understand and help them make sound investment decisions.
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