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Tuesday saw H.C. Wainwright analyst Raghuram Selvaraju reaffirm a Buy rating and a $15.00 price target for Emergent BioSolutions (NYSE:EBS) stock, which currently trades at $6.83. According to InvestingPro data, the stock has shown significant volatility, delivering a 115% return over the past year despite a 29% decline year-to-date. Following the release of the company’s fourth-quarter and full-year 2024 financial results, Selvaraju provided analysis and forecasts for the firm’s future performance. Despite Emergent BioSolutions posting a moderate miss in top-line revenue with $1.04 billion compared to the expected $1.12 billion, the company outperformed the forecasted net loss, reporting a loss of $3.60 per share against the anticipated $5.51 per share. InvestingPro analysis indicates the company maintains strong liquidity with a current ratio of 2.88, though it’s currently not profitable with a negative EBITDA of $4.8 million in the last twelve months.
Emergent BioSolutions has offered financial guidance for 2025, projecting top-line revenue to be between $750 million and $850 million. This is a downward revision from H.C. Wainwright’s original estimate of $1.17 billion, with the firm now adjusting its expectation to the upper end of the company’s guidance at $850 million. The company also anticipates achieving a cash flow-positive status within the year, with a net income ranging from $16 million to $66 million. H.C. Wainwright’s forecast aligns closely, predicting a full-year net income of $17.7 million for 2025.
The company’s outlook for 2025 includes an estimated total adjusted EBITDA of $150 million to $200 million, with an improvement in gross margins. H.C. Wainwright has taken this opportunity to establish its projections for the full-year 2026, anticipating approximately $1.2 billion in top-line revenue and net earnings of $3.83 per share.
In conclusion, Selvaraju’s reiterated Buy rating and 12-month price target of $15 for Emergent BioSolutions stock comes amidst the company’s mixed financial results and optimistic projections for cash flow positivity and earnings growth in the upcoming years. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available through the comprehensive Pro Research Report, which provides detailed analysis of the company’s financial health, scored as "GOOD" by InvestingPro’s proprietary metrics.
In other recent news, Emergent BioSolutions reported its fourth-quarter financial results, revealing a revenue shortfall that missed analyst expectations. The company posted adjusted earnings per share of $0.05, surpassing the anticipated loss of $0.41 per share. However, total revenue was $194.7 million, falling short of the consensus forecast of $243.33 million. This decline represents a 30% decrease year-over-year, attributed mainly to a 41% drop in NARCAN nasal spray sales, which amounted to $65.1 million. Additionally, revenues from anthrax medical countermeasures fell 71% to $32.5 million due to the timing of government purchases. Conversely, smallpox countermeasure sales rose significantly by 565% to $76.5 million, driven by higher international orders for the ACAM2000 vaccine. Emergent BioSolutions has projected total revenue for 2025 to be between $750 million and $850 million, with adjusted EBITDA expected to range from $150 million to $200 million. The company anticipates improved gross margins of 48% to 51%. Despite the earnings beat, the revenue miss and cautious outlook seem to be influencing investor sentiment.
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