On October 5, 2017, the FDA approved Neurocrine Biosciences’ 80 mg INGREZZA capsules for the treatment of adults with Tardive Dyskinesia (TD). INGREZZA is the first and only TD therapy taken as one capsule, once per day. The 80 mg capsule was expected to be available for patients at the end of October 2017 so sales should start rolling in for the company. You can read more about the FDA approval of INGREZZA here.
Neurocrine Biosciences Ratings
Immediately follow the approval of INGREZZA, a flurry of actions came from analysts but analysts were getting more bullish on Neurocrine Biosciences stock as early as August 2017. Here are recent analysts actions:
10/25/2017 Piper Jaffray Companies = Reiterated Neurocrine Biosciences rating of Buy, price target $76.
10/10/2017 Leerink Swann = Reiterated rating on Neurocrine Biosciences of Outperform, price target raised from $67 to $72.
10/5/2017 BMO Capital Markets = Reiterated rating of Outperform, price target set at $84.
10/3/2017 Jefferies Group LLC = Reiterated rating of Buy, price target raised from $66 to $69.
9/21/2017 Robert W. Baird = Reiterated rating of Outperform, price target set at $66.
9/17/2017 Needham & Company LLC = Reiterated rating of Buy, price target set at $58.
9/7/2017 Oppenheimer Holdings, Inc. = Reiterated rating of Buy, price target set at $70.
8/9/2017 Cowen and Company = Reiterated rating of Outperform, price target raised from $60 to $65.
Neurocrine Biosciences Pipeline
Neurocrine Biosciences is engaged in discovering and developing pharmaceuticals, in diseases with unmet medical needs, through its research and development (R&D) platform, focused on neurological and endocrine based diseases and disorders.
The company has a fairly robust pipeline that it’s advancing through clinical trials as shown in the figure below:
Neurocrine Biosciences Seasonal Play
Neurocrine Biosciences is a strong seasonal play. Over the next 13 weeks, Neurocrine Biosciences Inc. has on average historically risen by 28.5% based on the past 21 years of stock performance. Neurocrine Biosciences Inc. has risen higher in 13 of those 21 years over the next 13 week period, corresponding to a probability of 61%.
Neurocrine Biosciences Stock
I really like the pocket pivots (blue dots) off of uptrend line support and the candle over candle reversal. The rising large players volume is a thing of beauty as big players accumulate the stock. The positive Twiggs Money Flow supports the thesis that large players are accumulating the stock.
I found this stock by using the screener I created on Chartmill called GST Positive Divergence. You can find out how to get your hands on this stock screener here.
The gambit here is to play a continuation pattern where the stock keeps uptrending long enough to make a profit. Please review this stock trading lesson on the best chart patterns to trade where I talk more about trading the continuation pattern.
Price movement has been a little bit too volatile to find a good entry and exit point. It is probably a good idea to wait for a consolidation first as the second day candle, of the candle over candle reversal, reached up a bit too high.
Neurocrine Biosciences Review
NBIX's Return On Assets of -29.16% is among the best of the industry. NBIX does better than the industry average Return On Assets of -42.82%. NBIX has negative profitability ratios, so we won't be analyzing them here. NBIX's Profit Margin of -3470.51% is worse than the rest of the industry. The industry average Profit Margin is -251.99%. 84% of the industry peers have a better Profit Margin. NBIX has a very weak Piotroski-F score of 2. This is an indication of health and profitability issues for NBIX.
NBIX reported negative earnings for the last year, which makes the Price/Earnings Ratio negative. Also next year NBIX is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative. When comparing the current price to the book value of NBIX, we can conclude it is valued rather expensively. It is trading at 15.85 times its book value. Compared to an average industry price book ratio of 3.95, NBIX is valued more expensive than its industry peers. 91% of the companies listed in the same industry are valued cheaper.
When comparing the growth rate of the last 5 years to the growth rate of the upcoming 2 years, we see that the growth is accelerating. NBIX shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -74.34%. Based on estimates for the next 2 years, NBIX will show a very negative growth in Earnings Per Share. The EPS will decrease by -12.38% on average per year. Revenue for NBIX has decreased by -57.77% in the past year. This is quite bad. Revenue for NBIX have been decreasing by -34.65% on average. This is quite bad.
NBIX has a Current Ratio of 19.36. This indicates that NBIX is financially healthy and has no problem in meeting its short term obligations. NBIX is one of the better placed companies in its industry to meet its short term obligations. Its Current Ratio is much better than the industry average of 4.63. NBIX has a better rating than 95% of its industry peers. NBIX has a Quick Ratio of 19.36. This indicates that NBIX is financially healthy and has no problem in meeting its short term obligations. The Quick Ratio of NBIX is much better than the industry average of 4.42. NBIX has a better rating than 95% of its industry peers. NBIX has an Altman-Z score of 5.65. This indicates that NBIX is financially healthy and little risk of bankruptcy at the moment. The Altman-Z score of NBIX is much better than the industry average of 1.60. NBIX has one of the worst Debt to Equity ratios in its industry. 92% of its industry peers require less debt for financing their operations. NBIX has a very weak Piotroski-F score of 2. This is an indication of health and profitability issues for NBIX.
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