Bullish indicating open at $55-$60, IPO prices at $37
On Monday, H.C. Wainwright reaffirmed its positive stance on Collegium Pharmaceutical (NASDAQ:COLL), maintaining a Buy rating and a price target of $50.00 for the company’s shares. The research firm’s analyst highlighted the stock’s performance, which has been moving in tandem with the XBI, a biotech index that has experienced pressure recently. Currently trading at $30.05, with an EV/EBITDA ratio of 4.78x, InvestingPro analysis suggests the stock is currently undervalued. The analyst believes Collegium is not receiving the recognition it deserves in the current market, which favors companies that are generating strong cash flows or have a clear path to near-term profitability without the need for additional financing.Want deeper insights? InvestingPro has identified 8 additional investment tips for Collegium Pharmaceutical, including valuable insights about management’s share buyback activity and earnings growth potential.
Collegium Pharmaceutical, currently trading at a multiple of only 3.7 times the midpoint of its projected 2025 EV/EBITDA, has a history of surpassing its initial EBITDA guidance over the past three years. With impressive gross profit margins of 86.77% and revenue growth of 11.41% over the last twelve months, the company continues to demonstrate strong operational efficiency. The analyst acknowledges the reasons for the stock’s compressed multiple, citing potential generic competition for two of Collegium’s key revenue drivers, Nucynta IR/ER and Belbuca, which account for 25% and 30% of the company’s projected 2024 revenue, respectively.
The potential generic risk for these drugs is expected to materialize in the next two-plus years. Despite this, H.C. Wainwright reiterated its Buy rating, emphasizing that even with their high price target, Collegium’s stock would still be trading at a reasonable 5.4 times EV/EBITDA. This reiteration serves as a reminder of the firm’s confidence in Collegium’s valuation and future performance.Access the complete Collegium Pharmaceutical analysis, including detailed Fair Value calculations and comprehensive financial health scores, in the exclusive Pro Research Report available on InvestingPro.
In other recent news, Collegium Pharmaceuticals reported strong financial results for the fourth quarter of 2024, surpassing analyst expectations. The company achieved an earnings per share of $1.75, exceeding the forecast of $1.66, and posted quarterly revenue of $181.9 million, which was higher than the anticipated $179.48 million. This performance was driven by robust demand for its ADHD medication, Jornay, and pain management products, BELBUCA and Xtampza ER. Additionally, Collegium’s annual revenue for 2024 reached $631.4 million, marking an 11% increase from the previous year.
In terms of corporate governance, the company announced significant changes to its board and executive team. Gino Santini is set to become the new Chairman of the Board, replacing Michael Heffernan, who will retire along with Gwen Melincoff. Dr. Carlos Paya has been nominated to join the board, pending shareholder approval. On the executive front, David Dieter was appointed as Executive Vice President and General Counsel.
These leadership transitions are part of Collegium’s strategy for board refreshment and succession planning. The company is also focused on expanding its portfolio and strategically deploying capital to create shareholder value. Analyst firms have noted the company’s positive guidance for 2025, with expected revenue and EBITDA growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.