In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Amgen AMGN vis-à-vis its key competitors in the Biotechnology industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.
Amgen Background
Amgen is a leader in biotechnology-based human therapeutics. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006 and markets bone-strengthening drug Prolia/Xgeva (approved 2010) and Evenity (2019). The acquisition of Onyx bolstered the firm's therapeutic oncology portfolio with Kyprolis. Recent launches include Repatha (cholesterol-lowering), Aimovig (migraine), Lumakras (lung cancer), and Tezspire (asthma). The 2023 Horizon acquisition brings several rare disease drugs, including thyroid eye disease drug Tepezza. Amgen also has a growing biosimilar portfolio.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amgen Inc | 18.82 | 18.50 | 5.31 | 23.97% | $3.6 | $5.1 | 3.77% |
| AbbVie Inc | 37.94 | 20.21 | 4.46 | 14.25% | $4.74 | $7.44 | -5.97% |
| Gilead Sciences Inc | 16.21 | 4.23 | 3.48 | 10.03% | $3.23 | $5.49 | 0.11% |
| Vertex Pharmaceuticals Inc | 26.52 | 5.51 | 9.53 | 6.47% | $1.23 | $2.16 | 6.39% |
| Regeneron Pharmaceuticals Inc | 22.81 | 3.50 | 6.95 | 4.12% | $1.23 | $2.93 | 14.53% |
| Biogen Inc | 22.99 | 2.31 | 3.37 | -0.47% | $0.05 | $1.87 | 0.87% |
| BioNTech SE | 7.96 | 1.07 | 3.28 | 0.81% | $0.27 | $0.24 | -74.13% |
| Genmab A/S | 33.06 | 4.52 | 8.34 | 7.11% | $2.71 | $4.64 | 16.08% |
| Biomarin Pharmaceutical Inc | 114.83 | 3.40 | 7.31 | 0.83% | $0.07 | $0.46 | 15.04% |
| Incyte Corp | 28.40 | 2.43 | 3.34 | 3.54% | $0.23 | $0.86 | -3.73% |
| Neurocrine Biosciences Inc | 58.41 | 5.45 | 6.26 | 4.31% | $0.12 | $0.49 | 28.59% |
| United Therapeutics Corp | 12.71 | 1.90 | 5.18 | 4.92% | $0.36 | $0.53 | 27.76% |
| Exelixis Inc | 74.14 | 2.85 | 3.93 | 0.04% | $-0.01 | $0.45 | 14.62% |
| Grifols SA | 234.91 | 0.98 | 0.92 | 0.99% | $0.25 | $0.63 | 3.66% |
| Average | 53.15 | 4.49 | 5.1 | 4.38% | $1.11 | $2.17 | 3.37% |
After examining Amgen, the following trends can be inferred:
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With a Price to Earnings ratio of 18.82, which is 0.35x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 18.5, which is 4.12x the industry average, Amgen might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 5.31, which is 1.04x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 23.97% that is 19.59% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.6 Billion, which is 3.24x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $5.1 Billion, which indicates 2.35x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 3.77% is notably higher compared to the industry average of 3.37%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Amgen in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Amgen has a relatively higher debt-to-equity ratio of 7.9 compared to its top 4 peers.
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This could indicate a higher financial risk as the company is more reliant on borrowed funds, and investors may perceive it as a potential concern.
Key Takeaways
Amgen's low PE ratio suggests that it is undervalued compared to its peers in the Biotechnology industry. The high PB and PS ratios indicate that the company's stock price is relatively high compared to its book value and sales. On the other hand, Amgen's high ROE, EBITDA, gross profit, and revenue growth indicate strong financial performance and potential for future growth compared to its industry peers. Overall, Amgen appears to be a promising investment opportunity in the Biotechnology sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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