When Regeneron Pharmaceuticals Inc (NASDAQ:REGN) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Regeneron Pharmaceuticals performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see REGN has performed. See our latest analysis for Regeneron Pharmaceuticals
How Did REGN’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to assess many different companies on a similar basis, using new information. Regeneron Pharmaceuticals’s most recent twelve-month earnings is $1,278.1M, which, against the prior year’s figure, has escalated by a significant 60.28%. Given that these values are fairly short-term thinking, I’ve calculated an annualized five-year figure for Regeneron Pharmaceuticals’s net income, which stands at $462.5M. This suggests that, generally, Regeneron Pharmaceuticals has been able to consistently grow its profits over the past few years as well.
What’s enabled this growth? Let’s see if it is solely owing to an industry uplift, or if Regeneron Pharmaceuticals has seen some company-specific growth. In the past few years, Regeneron Pharmaceuticals increased its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% in the previous twelve months, and 20.18% over the past five. This means any tailwind the industry is enjoying, Regeneron Pharmaceuticals is capable of amplifying this to its advantage.
What does this mean?
Regeneron Pharmaceuticals’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Regeneron Pharmaceuticals gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Regeneron Pharmaceuticals to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for REGN’s future growth? Take a look at our free research report of analyst consensus for REGN’s outlook.
2. Financial Health: Is REGN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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.