Ligand Pharmaceuticals Inc

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LGND : NASDAQ : Health Care
$115.78 | %
Today's Range: 115.72 - 118.04
Avg. Daily Volume: 409,600
09/23/16 - 4:00 PM ET

Financial Analysis


LIGAND PHARMACEUTICAL INC's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased. LIGAND PHARMACEUTICAL INC has weak liquidity. Currently, the Quick Ratio is 0.55 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 467.55% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)19.5218.42
EBITDA ($mil)7.565.23
EBIT ($mil)4.754.58
Net Income ($mil)-5.7623.56


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)106.95182.21
Total Assets ($mil)616.8304.76
Total Debt ($mil)207.36200.57
Equity ($mil)391.9269.05


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin96.9886.17
EBITDA Margin38.7328.39
Operating Margin24.3324.89
Sales Turnover0.140.23
Return on Assets37.9110.71
Return on Equity59.4747.28
Debt Q2 FY16 Q2 FY15
Current Ratio0.5710.96
Debt/Capital0.350.74
Interest Expense3.052.97
Interest Coverage1.561.54


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)20.8519.84
Div / share0.00.0
EPS-0.281.11
Book value / share18.793.48
Institutional Own % n/a n/a
Avg Daily Volume412366.0376586.0

Valuation


BUY. LIGAND PHARMACEUTICAL INC's P/E ratio indicates a significant discount compared to an average of 44.84 for the Biotechnology industry and a significant discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 6.29 indicates a significant premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 10.96. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, LIGAND PHARMACEUTICAL INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LGND 10.91 Peers 44.84   LGND 50.73 Peers 22.14

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

LGND is trading at a significant discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

LGND is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
LGND 23.31 Peers 34.20   LGND NM Peers 0.50

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

LGND is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

LGND's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LGND 6.29 Peers 10.96   LGND 598.70 Peers 1.89

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

LGND is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

LGND is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LGND 27.98 Peers 681.73   LGND 24.04 Peers 52.29

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

LGND is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

LGND significantly trails its peers on the basis of sales growth

 

 

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