Is Longboard Pharmaceuticals (USA Stocks:LBPH) ready for a correction?
 | By Gabriel Shpitalnik | Macroaxis Story |
The proof of the pudding is in the eating, and for Longboard Pharmaceuticals, the taste could be quite rewarding by February 2024. The clinical-stage biopharmaceutical company, with a focus on developing transformative medicines for neurological diseases, presents a potential investment opportunity, despite its current financial challenges. Longboard Pharmaceuticals, traded under the ticker LBPH on NASDAQ, has a net asset value of $70.62M and a current valuation of $536.38M. However, the company has been operating at a loss, with a net income from continuing operations of $44.5M and an operating income of $44.8M. This financial situation is reflected in the company's high probability of bankruptcy at 73.92%. Despite these challenges, the company's strong current ratio of 11.95X and zero debt to equity ratio provide some financial stability. Additionally, the company's shares are owned by insiders at a rate of 20.18%, indicating a strong belief in the company's future prospects. The company's lead product candidate, LP352, is currently in Phase 1b2a clinical trials for the treatment of seizures associated with developmental and epileptic encephalopathies. Success in these trials could significantly boost the company's valuation and share price, currently targeted at $32.57. In conclusion, while Longboard Pharmaceuticals currently operates at a loss, its strong current ratio, zero debt, and promising clinical trials suggest a potential upsurge by February 2024. However, potential investors should carefully consider the company's high probability of bankruptcy and current financial challenges. Many millennials are enthusiastic about the biotechnology sector, so it's only fitting to examine Longboard Pharmaceuticals. We will assess why we maintain confidence in the prospect of a recovery. Is the company's valuation sustainable? In this article, I will provide a perspective on Longboard's valuation to give you a clearer understanding of whether to invest in this stock.
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Reviewed by Rifka Kats
Despite Longboard Pharmaceuticals' reported loss of 44.5M from continuing operations, the company's high institutional ownership of 85.18% suggests strong confidence from sophisticated investors. Additionally, with a current valuation of 536.38M and a book value per share of 2.18X, the company's price to book ratio of 11.37X indicates that the market may be undervaluing its assets. Thus, there could be a potential upsurge in the value of Longboard Pharmaceuticals (LBPH) by February 2024, presenting a potentially lucrative investment opportunity.
Key Takeaways
Longboard Pharmaceuticals currently holds 740K in liabilities with a Debt to Equity (D/E) ratio of 0.0. This may suggest that Longboard Pharmaceuticals is not leveraging borrowing sufficiently. Our advisory module supplements the current analysts and expert consensus on Longboard Pharmaceuticals. It assesses the company's potential for growth using all available fundamental, technical, and market-related data at the time.We determine the current worth of Longboard Pharmaceuticals using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Longboard Pharmaceuticals based exclusively on its fundamental and basic technical indicators. By analyzing Longboard Pharmaceuticals's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Longboard Pharmaceuticals's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Longboard Pharmaceuticals. We calculate exposure to Longboard Pharmaceuticals's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Longboard Pharmaceuticals's related companies.
Longboard Pharmaceuticals Investment Alerts
Longboard investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Longboard Pharmaceuticals performance across your portfolios.Please check all investment alerts for LongboardLongboard Pharmaceuticals Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Longboard value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Longboard Pharmaceuticals competition to find correlations between indicators driving the intrinsic value of Longboard.Longboard Pharmaceuticals Gross Profit
Longboard Pharmaceuticals Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Longboard Pharmaceuticals previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Longboard Pharmaceuticals Gross Profit growth over the last 10 years. Please check Longboard Pharmaceuticals' gross profit and other fundamental indicators for more details.
Going after Longboard Financials
Net Loss for the year was (43.95 M) with profit before overhead, payroll, taxes, and interest of 0. Longboard Pharmaceuticals Earnings before Tax is fairly stable at the moment. Also, Longboard Pharmaceuticals Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 5 years. The previous year's value of Longboard Pharmaceuticals Earnings Before Interest Taxes and Depreciation Amortization USD was -42,668,053. A wise investor knows that the future belongs to those who prepare for it today. With a current ratio of 11.95X, Longboard Pharmaceuticals (USA Stocks: LBPH) is well-positioned to weather financial storms, making it an attractive investment opportunity.Despite a net income loss of $43.9M, the company's strong cash position, with cash per share at 5.09X, and minimal total debt of $740K, indicate a robust financial health. The company's shares are largely held by institutions, with 85.18% of shares owned by them, suggesting a vote of confidence from the market. The target price of $32.57 also points towards a potential upsurge by February 2024. However, investors should be aware of the company's high risk-adjusted performance of 0.0943 and a probability of bankruptcy at 73.92%. As always, potential investors should consider their risk tolerance and investment horizon before making a decision. .
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