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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ligand Pharmaceuticals Incorporated (XNAS:LGND) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LGND
Name:
LIGAND PHARMACEUTICALS INCORPORATED (XNAS:LGND)
Sector:
47.14M
Industry:
Biotechnology
CEO:
Mr. John Higgins
Total Employees:
154
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -92.46% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LIGAND PHARMACEUTICALS INCORPORATED(LGND) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
93.89
One Month Price Target:
$94.47
Six Month Price Target :
$97.35
Likely Price in One Year's Time:
Ticker:
$100.81
Likely Trading Range Today Under (Normal Volatility)
$93.36
Price Upper limit ($) :
$94.52
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$86.89
This week:
$78.24
This month :
$62.59
Other Primary facts
Market Cap:
1.53B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
16.88M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.79%
-22.18%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$126.38
$111.50
$61.40
$76.28
Medium risk (<10%) entry points
Buy Call
Sell Call
$106.66
Buy Put:
Sell Put:
$103.48
$81.08
$84.30
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LGND
Sharpe Ratio:
1.17%
Comparison:
LGND, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -40.03% lower than the industry
& is -48.84% lower than the market/S&P 500 average
Average Returns/Yield of
LGND
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.03%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is -51.02% below industry average
Classification:
LGND, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
LGND has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.66%
Weekly Volatility:
8.17%
Monthly Volatility:
16.35%
Yearly Volatility:
56.63%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.24%
Volatility in last five trading days has been -38.63% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.46%
Weekly VaR:
-16.67%
Monthly VaR:
-33.34%
How Much Can the price of
LGND
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$66.76
This translates to price declining to:
$14.08
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
LGND is a 135.32% riskier investment compared to the market/S&P 500 & is 101.60% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.12% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LGND
Beta in relation to market/S&P 500--1.10
Expected beta in 1 year's time:
0.844
Expected beta in 3 year's time:
1.193
Unlevered (debt free) Beta:
0.94
Beta in relation to Nasdaq (XNAS):
1.092
Beta in relation to all global stocks::
0.953
Beta Comparison & Analysis
Beta of competitors/peers::
1.239
Beta is -11.47% lower than peers
Average Industry Beta:
1.152
Beta is -4.79% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.95%
Sustainable growth rate is -82.94% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.017
Alpha is -88.07% below industry average alpha yield
Alpha is 108% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LGND
Equity cost of capital:
0.107
Equity cost of capital is -3.42% below industry mean WACC
Unlevered (without debt) cost of capital:
9.14%
Before-tax cost of debt:
7.37%
After-tax cost of debt:
5.83%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
5.83%
WACC is 8.14% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.85
Revenue growth rate per share of (3Y):
2
Annual revenue growth rate is -93.06% below industry average
EPS:
$1.35
Expected Annual growth rate of EPS (3Y):
-53.60%
Expected future EPS growth rate is -637.07% lower than the Biotechnology industry
Free cash flow (FCF) per share:
$6.26
-
-
Debt per share
$11.45
EBITDA per share
$5.74
Valuation Analysis Today of
LGND
P/E Ratio:
71.86
P/E Ratio of Competitors/Peers:
271.43
P/E ratio is -73.53% lower than main peers & is -19.92% lower than the industry
Stock price/value with industry average P/E ratio: $121.13
LGND is -22.49% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.92
Price to sales ratio is -85.38% below the industry mean
P/B (Price to book value ratio):
2
Price to free cash flow: 14.99
Price to free cash flow ratio is 12.37% higher than the industry
Net income growth rate (3Y):
-49.05%
Net income growth rate is -169.50% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
24.37%
Net debt to equity ratio:
22.72%
Debt to assets ratio:
17.49%
Net debt to assets ratio:
16.31%
Debt-to-asset ratio is -58.51% below industry average
Ability to repay debt:
Interest coverage ratio:
6.74
Interest coverage ratio is -105.69% less than industry average
Looking forward:
Debt growth rate:
-25.40%
Annual debt growth is -119% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.01%
Analysis of Key Statistics
Correlation of price movement with the market:
0.5
Statistical significance of correlation:
LGND has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is 47.14% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.34
Correlation of price movement with Nasdaq (^IXIC):
-0.009
Covariance of price movement with the market:
-0.019
Kurtosis
6.109
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.235
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LGND
Gross Profit Margin Ratio:
230%
Operating Profit Margin Ratio:
24.24%
Operating profit margin is -105.65% lower than the industry
Net Profit Margin Ratio:
230%
Effective Tax Rate:
31.83%
Effective tax rate is 457.95% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
3.04%
Return on equity (ROE) is -105.30% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.18%
Return on assets (ROA) is -110.69% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
6.48
Current ratio is -19.90% below industry average
Cash Conversion Cycle (days):
102.8
Cash conversion cycle is -80.72% below industry average
The remaining useful life of property plant & equipment is: 6.5 years
Stock based compensation to net income ratio:
37.53%
In-depth Efficiency Analysis
Revenue generated per employee:
1.7M
Each employee generates 8% more revenue than industry average revenue per employee
EBITDA generated per employee:
629.8K
Each employee generates 63% more EBITDA than industry average revenue per employee
Profit generated per employee:
156.5K
Each employee generates 22% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
306.1K
Each employee generates 108% more free cash flow than industry average revenue per employee
Assets/Capital per employee
5.4M
Each employee generates 108% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 16.20%
Growth rate in R&D investment/expenditure is -551.48% lower than the industry
Competitors/Peer firms of
LGND
MYRIAD GENETICS, INC. (XNAS:MYGN)
REVOLUTION MEDICINES, INC. (XNAS:RVMD)
FULGENT GENETICS, INC. (XNAS:FLGT)
IGM BIOSCIENCES, INC. (XNAS:IGMS)
AXSOME THERAPEUTICS, INC. (XNAS:AXSM)
MODIVCARE INC. (XNAS:MODV)
HEALTHCARE SERVICES GROUP, INC. (XNAS:HCSG)
HESKA CORPORATION (XNAS:HSKA)
SORRENTO THERAPEUTICS, INC. (XNAS:SRNE)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
267.68M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
54.02M
167.96M
71.44M
63.35M
63.35M
-
- 2518.00K
132.27M
724.00K
14.40M
51.68M
96.98M
64.87M
24.10M
21.39M
6.81M
24.10M
Statement of Cash Flow
Date:
Period:
13.71M
Differed Income Tax :
- 16180.00K
Stock Based Compensation :
9.04M
Change in Working Capital :
60.83M
Accounts Receivables:
43.64M
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
52.01M
Investments in PP&E:
- 4875.00K
Net Acquisitions:
-
Purchases of Investments:
- 38190.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
14.99M
189.01M
204.00M
41.80M
25.61M
4.66M
276.07M
55.99M
181.21M
539.71M
-
35.66M
16.56M
829.12M
-
1.11B
6.97M
1.90M
5.80M
10.50M
23.20M
42.58M
193.30M
36.64M
269.41M
-
311.99M
17.00K
468.84M
- 1031.0K
325.37M
March 31, 2022 at 6:00:00 AM
202.80M
793.19M
1.11B
-
195.20M
180.2M
157.70M
- 750.00K
113.88M
- 13.00K
-
-
-
- 170408.00K
- 170421.00K
-
- 4529.00K
14.99M
19.52M
52.01M
- 4875.00K
47.14M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LGND
2023
2024
2025
2026
2027
$116.77
$125.37
$134.61
$144.53
$155.18