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Why NASDAQ:HALO Is a Promising High-Growth Stock in the Midst of Consolidation.
By Mill Chart Last update: Oct 6, 2023
Understanding NASDAQ:HALO's Growth Score
ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:HALO, the assigned 8 reflects its growth potential:
The Earnings Per Share has grown by an impressive 25.91% over the past year.
Measured over the past years, HALO shows a very strong growth in Earnings Per Share. The EPS has been growing by 42.34% on average per year.
The Revenue has grown by 58.71% in the past year. This is a very strong growth!
Measured over the past years, HALO shows a quite strong growth in Revenue. The Revenue has been growing by 15.83% on average per year.
HALO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.83% yearly.
The Revenue is expected to grow by 17.98% on average over the next years. This is quite good.
Health Assessment of NASDAQ:HALO
ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:HALO was assigned a score of 7 for health:
An Altman-Z score of 3.32 indicates that HALO is not in any danger for bankruptcy at the moment.
The Altman-Z score of HALO (3.32) is better than 76.04% of its industry peers.
HALO has a Debt to FCF ratio of 5.11. This is amongst the best in the industry. HALO outperforms 95.01% of its industry peers.
A Current Ratio of 6.58 indicates that HALO has no problem at all paying its short term obligations.
HALO has a Quick Ratio of 5.44. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
Evaluating Profitability: NASDAQ:HALO
ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:HALO scores a 8 out of 10:
HALO has a Return On Assets of 12.91%. This is amongst the best in the industry. HALO outperforms 97.50% of its industry peers.
HALO's Return On Equity of 154.74% is amongst the best of the industry. HALO outperforms 99.67% of its industry peers.
HALO has a better Return On Invested Capital (14.76%) than 98.17% of its industry peers.
HALO had an Average Return On Invested Capital over the past 3 years of 36.79%. This is significantly above the industry average of 12.00%.
The 3 year average ROIC (36.79%) for HALO is well above the current ROIC(14.76%). The reason for the recent decline needs to be investigated.
The Profit Margin of HALO (30.21%) is better than 97.50% of its industry peers.
In the last couple of years the Profit Margin of HALO has grown nicely.
HALO has a better Operating Margin (39.79%) than 98.50% of its industry peers.
In the last couple of years the Operating Margin of HALO has grown nicely.
HALO's Gross Margin of 77.42% is amongst the best of the industry. HALO outperforms 85.69% of its industry peers.
Why is NASDAQ:HALO a setup?
ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:HALO scores a 8 out of 10:
HALO has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 37.64, a Stop Loss order could be placed below this zone.
https://www.chartmill.com/news/HALO/Chartmill-14583-NASDAQ-HALO-a-strong-growth-stock-preparing-for-the-next-leg-up?utm_source=Chartmill-14583-NASDAQ-HALO-a-strong-growth-stock-preparing-for-the-next-leg-up&utm_medium=twitter&utm_campaign=blog&utm_content=HALO
Agreed
Yep, it was in Jan when Helen mentioned it:
Look at slide #30:
https://s28.q4cdn.com/284259014/files/doc_presentation/2023/01/Halo_Investor_Deck_FINAL-v2.pdf
I think it’s even longer than six months. I somehow remember it mentioned at the beginning of the year.
There have been no new deals since March 2022.
Admittedly, I am entertained by your posts and style of writing. I mean it. It’s not an underhanded compliment.
Would you share your perspective on the following?
2023 PE Estimates 17.13
2024 PE Estimates 12.1
2025 PE Estimates 9.89
Forecast 12 Month Forward PEG Ratio 0.66
These numbers might be a few days old. For the most up to date, see https://www.nasdaq.com/market-activity/stocks/halo/price-earnings-peg-ratios
I enjoy the comedy. You are good at it.
Having said this, the returns over the past 10 years and the next 10 are far more enjoyable for me.
I agree with your perspective. Please write to Halo IR and share your views as I have.
Once we have the new deals (any day now), Helen needs to go on CNBC/bloomberg and get the attention of retail investors.
Once she does, the following bargain numbers will be history. In the meantime, I’m buying every week and won’t be distracted by the noise from the naysayers who ignore the following facts:
Price/Earnings Ratio
2022 Actual 18.86
2023 Estimates 15.81
2024 Estimates 10.96
2025 Estimates 9.06
Forecast P/E Growth Rates
Growth 2023 19.23
Growth 2024 44.15
P/E Ratios 2023 15.81
P/E Ratios 2024 10.96
PEG Ratio
Forecast 12 Month Forward PEG Ratio 0.61
Source: https://www.nasdaq.com/market-activity/stocks/halo/price-earnings-peg-ratios
Thanks for the compliments but I don’t calculate the PEG ratio myself. I use Nasdaq.com and finviz.com
They do the calculation for you and you can see what assumptions they have for future year PE ratios.
Someone is expecting news after close today or tomorrow morning!
You are right, Maumar. Not only Helen did not say what F claimed she said on this board, she in fact indicated that they will continue the buy resume the program next year. Start listening to her answer at the 27 minute mark.
She did not say that. You can listen to it on halo’s website.
All she said is that they are done with it for this year.
If we have a 4x return with halozyme over the next 10 years as we did over the last decade, I don’t mind how they pay themselves (salary and options) as long it is consistent with fair-market value (i.e. how their peers are paid in the sector).
I will leave the crusade over fairness of corporate compensation vs “the orphan little investor” all to you :)
The wise and pragmatic investor would be more focused on the following than any such crusades.
2023 PE Estimates 17.13
2024 PE Estimates 12.1
2025 PE Estimates 9.89
Forecast 12 Month Forward PEG Ratio 0.66
If and when they fail to perform, then one could make the argument that they should be compensated lower than peers or even fired if results are significantly subpar.
Until then, you sell and I’ll buy!
:) Bottomline, Helen’s net Halozyme holdings have consistently gone up over the years (see link below). She started with under 100k shares to now over 600k shares.
Source: https://finviz.com/insidertrading.ashx?oc=1528185&tc=7
You sell the stock with the following fundamentals and I will gladly buy:
2023 PE Estimates 17.13
2024 PE Estimates 12.1
2025 PE Estimates 9.89
Forecast 12 Month Forward PEG Ratio 0.66
Source: https://www.nasdaq.com/market-activity/stocks/halo/price-earnings-peg-ratios
Do you understand how compensation for the C-suite works?
Part of their compensation is through options which they convert to shares. Overtime, they sell some and they hold on to some. They try to have a balanced portfolio of investments much like you probably do. Helen has over 600 thousand shares of halo. It would be silly to think that she would not sell some of the new shares she receives through options both for the sake of diversification but also for paying for taxes on the options she receives and for other life expenses.
I would worry if she sold significantly more shares than she is granted each year as a part of her compensation and her net halo holdings go down. But her halo holdings have gone steadily each year and not down.
I have been an investor in Halozyme since 2010 and in pharma since 1994. If I were to panic every time Helen or her predecessor sold some of the new shares they received as income back when the stock was trading under $10 or in the teens, I would have missed a 4x return. Same goes for any of the successful pharma or any other industry.
You sell your when your gains go from short to long term. I’ll buy them. Halozyme is a delicious bargain:
2023 PE 17.8
2024 PE 12.27
2025 PE 9.8
PEG 0.69
Does anyone care to speculate which pharma/biotech the 3 new Halozyme partnerships will be with?
No one said local news will bring retail investor. It doesn’t seem you read the post carefully.
It said: “Don’t be surprised if she goes on a couple of NATIONAL TV shows and retail investor learns more about Halo.”
If your point is that we don’t need retail investors, well, you are simply incorrect.
Yesterday Helen appeared on the local San Diego news network (fox 5 San Diego) and talked about Enhanze and the new HVAI. The clip is available on youtube. Halozyme is still 93% institutionally owned. Don’t be surprised if she goes on a couple of national TV shows and retail investor learns more about Halo.
What’s your expected share price when the following happen?
- 3 new partnerships (guided for this year)
- Tecentriq SC approval (September 15)
Don’t be surprised if we see new all time highs.
“Based on its Q2 2023 results, HALO’s EPS ranking went from 41 to 94. Suffice to say, by THAT measure, we’re WAY undervalued, even after this morning’s pop. Earnings Per Share (EPS) rating: compares a stocks last 2 quarters and 3 year EPS growth to all stocks. Ranks 1 to 99, with 99 the best. Rating of 90 means it outperformed 90% of all stocks.” From a astute investor on yahoo finance.
Nothing was mentioned re room temp
BTW, that’s their base scenario target price. Their bull scenario target price for halo is $86. If you have etrade, you can read their entire report that came out today on desktop etrade portal.
Morgan Stanley raised base price target from $60 to $61 today.
Other than the earnings beat and the guidance raise which by themselves typically make a stock go up 5-15%, there were 2 equally significant revelations today:
1) The inflation reduction act giving CMS the right to negotiate prices down with big pharma, went from a potential negative against halo’s future earnings to a positive. Think about this for a moment; if the CMS drug discounting is not applicable when a medication is combined with ENHANZE (as Helen explained today), more pharma will want to partner with halo.
2) The success of high volume auto-injector combined with Enhanze. This is, in my opinion, the most important news for halozyme’s future new partnerships and continued earnings growth.
With the Tecentriq SC PDUFA date in September and 3 new partnerships anticipated in the upcoming “weeks to months” (per Helen today), don’t be surprised if we see 50’s in short order and new all-time-highs by December.
Halozyme is still a delicious bargain based on the following stats from nasdaq:
2023 PE 17.8
2024 PE 12.27
2025 PE 9.8
And most importantly:
PEG 0.69
“J&J Chief Financial Officer Joseph Wolk, in an interview last week, said he does not expect the subcutaneous version of Darzalex, called Darzalex Faspro, to be eligible for negotiation until 2033 or 2034.
That could be five or more years beyond Darzalex, which will have been on the market for 13 years in 2028. Faspro, launched in 2020, already accounts for more than 80% of Darzalex revenue, which is due to rise to $9.5 billion this year.”
Halo is headed back to high 50’s
https://finance.yahoo.com/news/drugmakers-under-skin-skirting-early-101454930.html
“The U.S. Centers for Medicare & Medicaid Services, which runs the Medicare program for more than 60 million Americans, declined to comment on whether it will consider older medicines that add hyaluronidase as new.
Evercore ISI biotech analyst Michael DiFiore said he expects Medicare to do so because hyaluronidase is an active ingredient that allows the body to absorb more of the drug when it is injected.”
Something quite significant is brewing with halozyme. Share price is briliniantly postive even on days when the biotech benchmarks XBI and IBB are down. Don’t be surprised if they announce a big partnership or progress on high volumes AI.
Halozyme in a nutshell (source nasdaq):
Price/Earnings Ratio
2023 Estimates 17.65
2024 Estimates 12.12
2025 Estimates 9.55
Forecast 12 Month Forward PEG Ratio 0.68
Super cheap for a company with the following profit margins (also from Nasdaq):
Gross Margin
Operating
Margin
Pre-Tax
Margin
Profit Margin
Pre-Tax ROE
After Tax
ROF
79%
41%
38%
31%
147%
119%
Halo can easily double from here.
Link for Helen’s presentation today:
Near future catalysts:
1) Results for high volume auto-injector-rhuph20 feasibility study. This is a major innovation and a game changer
2) Earnings call - early August
3) new deals (3 deals projected by CEO for 2023)
4) September 15 Tecentriq SC PDUFA date
Don’t be surprised if we are back in 50’s soon
In a report released today, Caroline Palomeque from Berenberg Bank maintained a Buy rating on Halozyme, with a price target of $58.00.
In a report released today, Jason Butler from JMP Securities reiterated a Buy rating on Halozyme (HALO – Research Report), with a price target of $67.00. The company’s shares opened today at $37.55.
https://www.tipranks.com/news/blurbs/jmp-securities-reaffirms-their-buy-rating-on-halozyme-halo
FDA approved the Alzheimer’s drug Leqembi today.
“The drug is given intravenously every two weeks, meaning patients will need to go to a hospital or clinic for the infusion.”
This is perfect for Enhanze.
https://apple.news/AP0XkvrpTRo6mnqVts9TuMA
Couple of weeks ago, Helen told the Goldman Sac’s interviewer that the study results for new version of Enhanze will be available by mid year. Interviewer speculated that the new partner(s) will be sign contracts after these results. Helen did not deny this.
Halo should continue to have positive momentum in anticipation of these results and the new partnerships.
Berenberg Bank analyst Caroline Palomeque reiterated a Buy rating on Halozyme today and set a price target of $58.00. The company’s shares closed yesterday at $34.57.t
Well said. Agreed.
I stand corrected. Checked on MS/etrade portal. Tips Rank article was incorrect.
I’m glad I looked. Halozyme has had 6 buy ratings from the following analysts within the last couple of days:
1. Joseph Catanzaro
Piper Sandler
2. Robert Wasserman
Benchmark Co.
3. Jason Butler
JMP Securities
4. Vikram Purohit
Morgan Stanley
5. Corinne Jenkins
Goldman Sachs
6. Caroline Palomeque
Berenberg Bank
I don’t know where you get your info from, but it seems like this one was incorrect too. Piper Sandler PT is $66 (not $46 as you indicated)
“The biopharmaceutical company that develops novel recombinant human enzymes for enhancing the delivery of biologics and drugs. Today, Piper Sandler analyst Joseph Catanzaro reiterated a Buy rating on HALO stock with a price target of $66. Overall, the consensus 12-month price target of the three out of four top analysts who recently rated the stock a Buy, implies an upside of 53.7%.”
Source: https://www.tipranks.com/news/blurbs/halozyme-halo-gets-a-buy-from-jmp-securities
Maybe tiprank’s article is incorrect. What’s your source?
In a report released today, Jason Butler from JMP Securities reiterated a Buy rating on Halozyme (HALO – Research Report), with a price target of $66.00. The company’s shares closed yesterday at $30.58.
https://www.tipranks.com/news/blurbs/halozyme-halo-gets-a-buy-from-jmp-securities
You are incorrect again! Please read the reference (link) I provided. It is dated 5/9/23 and clearly states:
“Berenberg Bank analyst maintained a Buy rating on Halozyme ( – ) today and set a price target of $58.00. The company’s shares opened today at $30.09.”
Source: https://www.tipranks.com/news/blurbs/berenberg-bank-remains-a-buy-on-halozyme-halo
This is clearly not old news from March as you stated. They are reiterating their “buy” rating and price target despite the the recent price declines.
Goldman did the same.
Source: https://www.tipranks.com/news/blurbs/goldman-sachs-reaffirms-their-buy-rating-on-halozyme-halo
See the table at the bottom of this link for dates:
https://www.tipranks.com/stocks/halo/forecast
The following Q&A (see below) between an analyst and Helen during the earnings call puts the concerns re IRA and patent issues to rest for good. No wonder Goldman Sachs reaffirmed their buy rating yesterday. (https://www.tipranks.com/news/blurbs/goldman-sachs-reaffirms-their-buy-rating-on-halozyme-halo)
“Analyst
Hi, guys. Thanks for taking my question. Two more ones on the IRA, but different versions. So just regarding CMS's Part D guidance document, I think for now everyone is operating under the assumption that Part B will look like very much like Part D. So assuming that's true, now that HALO's lawyers and policy teams have had some time to fully digest the guidance document, are there any nuances contained therein that perhaps make you incrementally more or less confident on how enhanced formulated products may qualify as single source drug? That's my first question. My other question is just to remind us how the EU, the EPO, DARZALEX/FASPRO patent revocation is specific to just DARZALEX/FASPRO? And why there wouldn't be any read across to your other EU co-formulation patents? Thank you.
Helen Torley
All right. Thanks, Mike, for those questions. Yes, a lot of interest obviously in the IRA, so we talked about this a lot when the guidance came out. And if we -- if there is an interpretation or the Part B guidance comes back similar to the Part D, our interpretation based on experts in Washington DC is if you focus on the part of the guidance that describes the fixed-dose combination.
And, yes, we use an example of two corticosteroid drugs and talks about the both active ingredients not being considered the same as a single agent use alone. I think that is what we see as a perfect description of ENHANZE because the rHuPH20 is designated in multiple documents from the SC as an active ingredient.
Now why is that? It's because -- as I mentioned earlier, it does make the whole subcutaneous delivery possible, that allows for a shorter injection, it allows for a reduced infusion related reactions on occasion. And frankly patients would not be able to receive their therapy in such a simple short way, nor with the healthcare system be able to accrue the benefit of the shorter time.
So certainly our reading at this point in time, if it's identical, is that the subcu will be treated as a separate single source agent than the IV drugs. But with all the appropriate caveats with CMS has to issue the specific guidance for Part B.
Moving to the EU patent, yes, I think for people -- few weeks ago Janssen had one of their two approved European co-formulation patents for DARZALEX revoked. And we still have, I will note, another one that's under review.
This was a single revocation of the third patent, so they have a second patent that remains as well as another patent pending. This was a specific instance where the judgment of the courts that because Janssen had published a clinical trial protocol that mentioned the invention that they relied on in the patent before they filed the patent, that that meant that they were not able to use that invention, which was reduced infusion related reaction, to support that particular patent.
Now the reason this is only applying for this single patent from DARZALEX is that other of our partners relied on other inventions to support their patents. So one of the core things about co-formulation patents is it has to be novel, not described before an invention. And so by definition, all of our partners are looking at their data to look for something different. And so that's why there is no read through to any of the other patents that have filed and/or any of our other European partners. And companies are careful to make sure that they do get the filings first to the patent office before they make the data public.
I'll also just comment that, just in case anyone has a question in US, the US does not have the same exact approach as Europe with regard to this pre-publication and a clinical protocol. And so we -- there is no read through to the United States either. I'll just also comment the next step in Europe could be for Janssen to file an appeal. If Janssen did file an appeal, the patent would be unrevoked and usually the appeal process can take three to four years.
But again I'll also mention that Janssen continues to have other patents. And for Halozyme, we're very confident in our revenues in '23 and to continue to receive royalties from Janssen until at least 2030. So there was attention to this that we certainly are feeling very well about our Janssen royalties and the very strong growth that we're seeing there.