H.C. Wainwright has updated its valuation on Ligand Pharmaceuticals (NASDAQ: LGND), raising the price target to $157 from $144, while maintaining a Buy rating on the stock.
The firm anticipates the third-quarter 2024 results, expected in early November, and has adjusted its valuation to reflect recent business deals by Ligand.
The analyst from H.C. Wainwright cited the company's diversified risk profile as a key factor in the positive outlook. According to the firm, Ligand's broad spread of risk, underpinned by solid core revenues and the potential value of future developments, provides a buffer against the volatility often caused by adverse news from partnered company assets.
In other recent news, Ligand Pharmaceuticals reported a significant increase in its Q2 revenue and earnings per share (EPS). The company's Q2 revenue rose by 58% year-over-year to $41.5 million, while its core adjusted EPS grew by 121% to $1.40. Ligand's royalty revenue was boosted by products from Travere, Jazz, and Merck, totaling $23.2 million. The company also announced an investment of $175 million into new opportunities and regulatory approvals for products expected to enhance its royalty revenue.
Ligand ended the quarter with a substantial cash and investments position of $227 million. The company plans to invest around $200 million per year in new opportunities and aims to maintain its strong cash position. Future regulatory approvals for products from Merck and Verona Pharma (NASDAQ:VRNA) are anticipated to significantly boost Ligand's royalty revenue.
InvestingPro Insights
Complementing H.C. Wainwright's positive outlook on Ligand Pharmaceuticals (NASDAQ:LGND), recent data from InvestingPro provides additional context to the company's financial position and market performance.
Ligand's stock has shown remarkable strength, with a one-year price total return of 104.24% as of the latest data. This aligns with the analyst's optimistic view and is reflected in the stock trading near its 52-week high, at 94.88% of that peak.
The company's financial health appears robust, with InvestingPro Tips highlighting that Ligand holds more cash than debt on its balance sheet and its liquid assets exceed short-term obligations. This strong financial position supports the firm's ability to invest in future projects and navigate potential market volatility, as noted by H.C. Wainwright.
While Ligand's P/E ratio stands at 44.35, suggesting a premium valuation, an InvestingPro Tip indicates that the company is trading at a low P/E ratio relative to near-term earnings growth. This could imply that the market has not fully priced in Ligand's growth potential, which aligns with the analyst's increased price target.
For investors seeking a deeper understanding of Ligand's prospects, InvestingPro offers 12 additional tips, providing a comprehensive view of the company's financial health and market position.
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