The markets might be in turmoil, but spare a thought for the current woes at biotech Amarin (AMRN). Over the past 7 trading sessions, shares have retreated by 44% as investors charged to the exit doors following a botched date in court.
Last week, an appeals court rejected Amarin’s appeal concerning a lost patent court case against generic drug makers Hikma Pharmaceuticals and Dr. Reddy’s, who are seeking to bring to market their own versions of Amarin’s high triglyceride treatment Vascepa.
As Vascepa is Amarin’s only product, the ruling has obviously spooked investors, who are concerned the treatment’s vast commercial opportunity is fading fast. However, Cantor analyst Louise Chen argues the game is far from over.
Chen said, “We continue to think that AMRN's EU opportunity is underappreciated and that generics companies will not be able to manufacture enough product to meet the demand in the U.S. market. We still believe that AMRN may generate strategic interest, possibly from an EU company with an established cardiovascular franchise.”
Chen’s remarks echo those made by Amarin following the negative ruling. The company will request an en banc review of the panel decision, but in the meantime have stressed its “go-forward strategy” remains the same. Regulatory approval for Vascepa in the EU is expected shortly and Amarin should launch Vascepa in the region early next year.
Furthermore, the biotech and its partners are still in the hunt for additional regulatory approvals for Vascepa in China, and in additional countries in the Middle East (Vascepa is already approved in Lebanon and the United Arab Emirates), and “remain confident in the global market potential of Vascepa.”
All in all, Chen rates AMRN an Overweight (i.e. Buy), although the “downward earnings estimate revisions for U.S. sales of Vascepa” result in a price target reduction. The figure is slashed from $35 to $15. Nevertheless, upside from current levels is a plentiful 268%. (To watch Chen’s track record, click here)
The rest of the Street also expects more upside. Going by the $11.38 average price target, the analysts expect shares to add a hefty 179% over the next 12 months. The stock currently has a Moderate Buy consensus rating, based on 6 Buys and 4 Holds. (See AMRN stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Red-hot tech stocks fell off a cliff this month, and Netflix (NFLX) stock was no exception -- the stock tumbled nearly 13%. Nevertheless, 2020 so far has been bountiful enough for a stock boosted by the coronavirus tailwinds, with shares up by 49% year-to-date.
So, can Netflix resume the accumulation of share gains? Or has momentum run its course for now?
According to Raymond James' Andrew Marok, there is currently “limited potential for positive revisions and multiple expansion until more certainty is gained around the post-COVID-19 trajectory.” In other words, the analyst believes NFLX is trading at a lofty valuation and, as such, rates the stock a Market Perform (i.e. Hold). (To watch Marok’s track record, click here)
The analyst has no doubt Netflix is a great company and said, “We are positive on NFLX’s positioning within the large and growing video-on-demand space, given 1) its position as the dominant global video-on-demand player; 2) competitive advantages in content development and distribution; and 3) improving financial position with expanding operating margins and decreasing FCF deficits/reliance on external financing. We continue to view NFLX as a long-term winner in the expanding video-on-demand space.”
Additionally, the analyst doesn’t count the recent entry of other heavyweights such as Apple TV+, Disney+, HBO Max, and Peacock into the streaming arena as necessarily a threat. The analyst sees room for “multiple winners in the space as the pie grows.”
That said, as some consumers will look out for particular content only available on other platforms, Marok expects there is “likely to be some subscriber impact at the margin.” Furthermore, as the new players are priced to take share, there could also be a “limit on near-term pricing power in developed markets.”
Moreover, the last several years have taken their toll on the company’s FCF (free cash flow) as the heavy investment in content has resulted in FCF deficits. With the long term in mind, however, Marok expects the “company's growth will begin to overtake the growth in content investment, with Netflix reaching FCF breakeven in 2024E.”
Among Marok’s colleagues, the tone is slightly more bullish. NFLX's Moderate Buy consensus rating is based on 20 Buys, 10 Holds and 5 Sells. Meanwhile, an 8% upside could be in the cards, should the $520.43 average price target be met over the next months. (See Netflix stock-price forecast on TipRanks)
To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Not many consider social media giant Facebook (FB) a slouch on the development front, but one top analyst argues “the market may be underappreciating the level of product development at FB.”
RBC analyst Mark Mahaney counts three “promising product initiatives” which he believes aren’t receiving the attention they deserve.
The first is Facebook Marketplace. Estimated to boast over 1 billion MAUs (monthly active users), making it larger than Alibaba, twice as big as eBay and approximately 12 times the size of Craigslist.
“Add it to the list of FB’s under monetized 1B+ MAU properties (incl. Messenger & WhatsApp),” says the 5-star analyst and “the win for FB is 4-fold: i) Early-Stage Ad Revenue: Sponsored Ads & Boosted Listings; ii) Commercial Signal: Queries generate a signal that can be used to target ads across FB properties; iii) Engagement: Marketplacers use Facebook more frequently; & iv) Option Value: Potential to eventually charge listing & final value & payment processing fees.”
To this end, Mahaney expects Marketplace to generate revenue of up to $2.8 billion by 2024.
Next up is Facebook Shops. The pandemic has accelerated both e-commerce trends and social media engagement and Mahaney believes Facebook will be the prime beneficiary of Social Commerce. The analyst expects “$4.9-8.0B in incremental 2025 Revenue driven by higher CPMs on more ‘transactionable’ ad units powered by Facebook Shops.”
Lastly, there is Instagram Reels, Facebook’s attempt to ride the TikTok gravy train. While it is too early to tell if the new addition will prove to be a resounding success, Mahaney believes “the product is reasonably competitive,” whilst a TikTok ban - still a possibility - could divert users to the new offering.
At the other end of the spectrum, as far as headwinds are concerned, Mahaney believes the upcoming changes to Apple’s identifier for advertisers (IDFA), which will come into effect next year, will have minimal impact of less than 1% on Facebook’s revenue.
All in all, Mahaney rates FB shares an Outperform (i.e. Buy) along with a $320 price target. Investors could be pocketing a 20% gain, should Mahaney’s target be met in the year ahead. (To watch Mahaney’s track record, click here)
Most of the Street backs Mahaney’s call. FB's Strong Buy consensus rating is based on 30 Buys, 4 Holds and 1 Sell. Given the $293.16 average price target, the analysts expect 10% from current levels. (See FB stock analysis on TipRanks)
To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Tesla (TSLA) stock has taken investors on quite the roller-coaster ride. It is now trading at $372.72 per share, down 25% this month, which in turn reflects a 13% rise from $330 per share just a few days prior.
The tech rally’s poster boy was hit the hardest during the recent downturn, and its exclusion from the latest S&P 500 reshuffle has soured sentiment somewhat.
However, Tesla has a big catalyst on the horizon, in the shape of the much-anticipated Battery Day, which will take place on September 22.
Oppenheimer analyst Colin Rusch expects Musk and Co. to shine a light on several points of interest at the upcoming event.
“We see four key areas of focus: anode and cathode material design, manufacturing process tech, leverage of the battery management system into powertrain optimization, and its path to solid state batteries, especially its electrolyte development approach. We're also expecting an evolution of TSLA’s main geometry for its cells showing wider diameters and not a move to prismatic cells. Last but not least, we expect an update on its relationships with cell partners like Panasonic and CATL,” the 5-star analyst noted.
Investors should also get a better idea on how Tesla plans to make use of Maxwell Technologies, the ultra-capacitor manufacturer and battery technology company Tesla acquired in 2019. CEO Elon Musk has already suggested Maxwell will have a major impact on batteries, yet it is still unclear how the company fits in to the Tesla game plan. Rusch expects “meaningful detail on how TSLA will deploy the technology.”
All in all, Rusch rates TSLA an Outperform (i.e. Buy), while maintaining a $451 price target. The figure represents possible upside of 21% from current levels. (To watch Rusch’s track record, click here)
Rusch is currently among a minority on Wall Street. The majority take a more cautious approach. Based on 5 Buys, 15 Holds and 10 Sells, the analyst consensus rating on TSLA is a Hold. Over the coming months, the Street expects shares to trend 22% lower, given the $293.67 average price target. (See TSLA stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.