The FDA approval of ZYNTEGLO seems to have boosted the stock price. The stock might be best avoided due to its poor profitability. Please read on.
shutterstock.com - StockNews The company is engaged in the research, development, and commercialization of therapies for severe genetic diseases.
The FDA approved ZYNTEGLO, also known as beti-cel, a one-time gene therapy custom-designed to treat the underlying genetic cause of the disease.
After the FDA approval, the company released details of its U.S. commercial infrastructure to support rapid access to ZYNTEGLO.
Over the last year and a half, the stock has declined. Over the past month, it has gained 3.8%.
Blue's performance could be affected by a few factors.
The valuations are stretched.
Blue's forward EV/Sales is higher than the industry average of 4.19x. The forward Price/Sales multiple of the stock is higher than the industry average.
The profit margins are negative.
Blue's trailing-12-month ROE was a negative 87.14%, compared to the industry average of a negative 38.5%. Its trailing-12-month ROTC and ROA of a negative 36.33% and a negative 103.59% are lower than their industry averages.
The growth story is weak.
Blue's revenue has fallen over the past three years and the last five years. The tangible book value and total assets have gone down over the last three years.
POWR ratings reflect bad news.
This outlook is reflected in the POWR Ratings. The stock has a D rating, which is equivalent to a sell in our rating system. The POWR Ratings are calculated using 118 different factors.
Blue has a Sentiment grade of F, which is in line with Wall Street's expectations of a 3.7% stock price decline. The stock has an F grade for stability.
Blue has a D grade for quality.
It is a member of the 398-stock Biotech industry. The industry has a rating.
There are additional POWR ratings for Blue. Here you can view all the top stocks.
The bottom line.
Blue's revenues are expected to increase as a result of the commercialization of ZYNTEGLO. The company's past revenue growth and profitability are troubling. Blue might be best avoided now because Wall Street is expecting a downturn in its stock price.
How does the company stack up against its peers?
While BLUE has an overall POWR Rating of D, it might be worth looking at its industry peers, such as Vertex Pharmaceuticals Incorporated and Genfit S.A.
The stock was trading at $6.65 per share on Friday morning. Blue has declined compared to the S&P 500 index which has risen.
She pursued a career in investment research because of her interest in understanding the impact of broader economic changes on financial markets.
There is more.
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