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Oragenics Inc (NYSEMKT:OGEN), a US$5.0m small-cap, operates in the healthcare industry, which faces key trends such as rising demand fuelled by an aging population and the growing prevalence of chronic diseases. Healthcare analysts are forecasting for the entire industry, a positive double-digit growth of 11.9% in the upcoming year , and a whopping growth of 58.2% over the next couple of years. This rate is larger than the growth rate of the US stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Oragenics is lagging or leading in the industry.
What’s the catalyst for Oragenics’s sector growth?
Data analytics is creating opportunities for innovations, however, stakeholders are challenged with the pressure of reducing costs. In the past year, the industry delivered growth in the thirties, beating the US market growth of 15.5%. Oragenics lags the pack with its negative growth rate of -0.4% over the past year, which indicates the company has been growing at a slower pace than its biotech peers. Moreover, the trend of below-industry growth rate is expected to continue in the future with Oragenics poised to deliver a -22.9% growth compared to the industry average growth rate of 11.9%. As an industry laggard, Oragenics may be a cheaper stock relative to its peers.
Is Oragenics and the sector relatively cheap?
The biotech sector’s PE is currently hovering around 26.44x, above the broader US stock market PE of 19.88x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry did return a higher 22.1% compared to the market’s 10.6%, which may be indicative of past tailwinds. Since Oragenics’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Oragenics’s value is to assume the stock should be relatively in-line with its industry.
Oragenics’s industry-beating future is a positive for investors. If Oragenics has been on your watchlist for a while, now may be the time to enter into the stock, if you like its growth prospects and are not highly concentrated in the biotech industry. However, before you make a decision on the stock, I suggest you look at Oragenics’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has OGEN’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Oragenics? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.