Repligen (RGEN)'s Hidden Value: An In-Depth Analysis of Its Market Worth
Despite a daily loss of 3.9% and a 3-month loss of 3.4%, Repligen Corp (NASDAQ:RGEN) shows a promising Earnings Per Share (EPS) of 2.42. This raises a compelling question: Is the stock significantly undervalued? In this article, we'll take a deep dive into the valuation analysis of Repligen (NASDAQ:RGEN). So, let's get started.
Company Overview
Repligen Corp is a leading life sciences company with a global presence. It is renowned for developing and commercializing innovative bioprocessing technologies and systems that enhance efficiencies in manufacturing biological drugs. With a broad customer base ranging from life science companies to global biopharmaceutical companies and contract manufacturers, Repligen markets its products worldwide. The majority of its revenue is generated in North America.
With a current stock price of $147.19 per share and a market cap of $8.20 billion, it's critical to compare these figures with the GF Value, which is an estimation of fair value. This comparison will pave the way for a deeper exploration of the company's value.
Understanding GF Value
The GF Value is a proprietary measure that represents the current intrinsic value of a stock. It's calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line gives an overview of the fair value at which the stock should ideally be traded.
According to GuruFocus Value calculation, Repligen (NASDAQ:RGEN) appears to be significantly undervalued. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher. Given Repligen's current price and market cap, the stock shows every sign of being significantly undervalued.
Because Repligen is significantly undervalued, the long-term return of its stock is likely to be much higher than its business growth.
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Assessing Financial Strength
Before investing in a company, it's crucial to assess its financial strength. Investing in companies with poor financial strength carries a higher risk of permanent loss. The cash-to-debt ratio and interest coverage can provide a great insight into a company's financial strength. Repligen has a cash-to-debt ratio of 1.43, which is lower than 59.01% of 832 companies in the Medical Devices & Instruments industry. However, the overall financial strength of Repligen is 8 out of 10, indicating strong financial health.
Evaluating Profitability and Growth
Investing in profitable companies, especially those with consistent profitability over the long term, is less risky. A company with high profit margins is usually a safer investment than those with low profit margins. Repligen has been profitable 10 over the past 10 years. Over the past twelve months, the company had a revenue of $729.30 million and Earnings Per Share (EPS) of $2.42. Its operating margin is 18.61%, ranking better than 82.15% of 829 companies in the Medical Devices & Instruments industry. Overall, the profitability of Repligen is ranked 9 out of 10, indicating strong profitability.
Growth is one of the most critical factors in the valuation of a company. Companies that grow faster create more value for shareholders, especially if that growth is profitable. The average annual revenue growth of Repligen is 36.4%, ranking better than 89.12% of 726 companies in the Medical Devices & Instruments industry. The 3-year average EBITDA growth is 60.4%, ranking better than 92.46% of 729 companies in the same industry.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) to its weighted average cost of capital (WACC) can also evaluate its profitability. ROIC measures how well a company generates cash flow relative to the capital it has invested in its business. WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. If the ROIC exceeds the WACC, the company is likely creating value for its shareholders. During the past 12 months, Repligen's ROIC was 6.18 while its WACC came in at 10.17.
Conclusion
Overall, Repligen (NASDAQ:RGEN) stock shows every sign of being significantly undervalued. The company's financial condition is strong, and its profitability is robust. Its growth ranks better than 92.46% of 729 companies in the Medical Devices & Instruments industry. To learn more about Repligen stock, you can check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
