H.C. Wainwright lifts Halozyme stock target to $72, maintains Buy

On Tuesday, H.C. Wainwright analyst Mitchell Kapoor increased the price target for Halozyme Therapeutics (NASDAQ:HALO) stock to $72 from the previous target of $70, while reiterating a Buy rating. According to InvestingPro analysis, the stock is currently undervalued, with strong financial metrics including impressive revenue growth of 22.4% and an industry-leading gross margin of 84.3%. The adjustment follows Halozyme’s fiscal year 2024 financial results, which were disclosed on Monday. The company reported total revenues of $1,015 million, narrowly surpassing the consensus estimate and slightly underperforming H.C. Wainwright’s forecast of $1,024 million.

The revenue outperformance was largely attributed to a significant uptick in royalty revenues, which amounted to $571.0 million, almost perfectly aligning with the analyst’s prediction of $570.9 million. Halozyme’s royalty income is derived from a mid-single-digit percentage blended royalty rate on partnered products that incorporate its ENHANZE technology. The robust royalty revenue indicates a strong market demand for Halozyme’s co-formulated products. InvestingPro data reveals the company maintains exceptional financial health with a "GREAT" overall score of 3.58 out of 5, supported by strong profitability and growth metrics.

The leading contributors to Halozyme’s royalty revenue growth in the fourth quarter of 2024 were the sustained commercial success of DARZALEX Faspro and Phesgo, alongside the initial growth seen with VYVGART Hytrulo for the treatment of generalized myasthenia gravis (gMG). The company’s reported research and development (R&D) expenses were $79.0 million, and selling, general, and administrative (SG&A) expenses totaled $154.3 million, both slightly below H.C. Wainwright’s estimates.

For the year 2024, Halozyme recorded net earnings of $444 million, which translates to $3.43 per diluted share. Looking ahead, H.C. Wainwright’s full-year 2025 earnings per share estimate is now set at $4.63, taking into account the ongoing $750 million stock buyback program. InvestingPro highlights that management has been aggressively buying back shares, with 13 additional ProTips available to subscribers, including insights on the company’s perfect Piotroski Score of 9 and attractive valuation metrics. The company concluded 2024 with approximately $596 million in cash, which, according to the analyst, appears more than sufficient to support future operations given the company’s current profitability. This is further supported by InvestingPro’s analysis showing a strong current ratio of 7.8, indicating excellent liquidity. After updating their financial model and accounting for the reduced number of shares and dilutive securities outstanding, H.C. Wainwright has reiterated their Buy rating and raised the 12-month price target. For comprehensive analysis including Fair Value estimates and detailed financial health metrics, investors can access the full Pro Research Report available on InvestingPro.

In other recent news, Halozyme Therapeutics reported robust fourth-quarter earnings and revenue, surpassing analyst expectations. The company’s adjusted earnings per share for the quarter were $1.26, outperforming the analyst estimate of $1.15. Revenue for the quarter was reported at $298 million, exceeding the consensus forecast of $294.15 million. This strong performance was primarily driven by growth in key products utilizing Halozyme’s ENHANZE drug delivery technology.

In terms of future expectations, Halozyme reiterated its guidance for fiscal year 2025, projecting total revenue between $1.15 billion and $1.225 billion, indicating potential year-over-year growth of 13% to 21%. The company also expects adjusted earnings per share in the range of $4.95 to $5.35, which is above the current analyst consensus of $5.05.

Additionally, JMP Securities analysts increased their price target on Halozyme shares from $73.00 to $78.00 while maintaining a Market Outperform rating. This adjustment came after the company’s strong financial performance and the reaffirmed future guidance. The analysts also highlighted the potential of Halozyme’s current pipeline programs and the impact of the company’s accelerated share repurchase program on its stock valuation.

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