May Insights Into Healthcare Stocks: Celldex Therapeutics Inc (NASDAQ:CLDX)
Celldex Therapeutics Inc (NASDAQ:CLDX), a US$104.06M small-cap, is a healthcare company operating in an industry, which faces demand for new drug development to meet new or persistent chronic illnesses, and ongoing need for biotech drugs as Baby Boomers continue to age. Healthcare analysts are forecasting for the entire industry, a relatively muted growth of 9.58% in the upcoming year , and a whopping growth of 32.25% over the next couple of years. However this rate still came in below the growth rate of the US stock market as a whole. Today, I will analyse the industry outlook, as well as evaluate whether Celldex Therapeutics is lagging or leading in the industry. See our latest analysis for Celldex Therapeutics
What’s the catalyst for Celldex Therapeutics’s sector growth?
Data analytics and other technology-enabled approaches are creating opportunities for innovations, however, stakeholders have been challenged to keep abreast of this structural shift while under pressure to cut costs. In the past year, the industry delivered growth in the twenties, beating the US market growth of 13.51%. Celldex Therapeutics lags the pack with its negative growth rate of -11.61% over the past year, which indicates the company will be growing at a slower pace than its biotech peers. However, the future seems brighter, as analysts expect an industry-beating growth rate of 23.26% in the upcoming year.
Is Celldex Therapeutics and the sector relatively cheap?
The biotech sector’s PE is currently hovering around 25.29x, above the broader US stock market PE of 18.29x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry did return a higher 18.07% compared to the market’s 11.16%, which may be indicative of past tailwinds. Since Celldex Therapeutics’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Celldex Therapeutics’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
Celldex Therapeutics’s industry-beating future is a positive for investors. If Celldex Therapeutics 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 Celldex Therapeutics’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 CLDX’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 Celldex Therapeutics? 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 pass 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.
