Incyte (INCY) AI Stock Analysis

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Incyte

(NASDAQ:INCY)

66Neutral

Incyte's overall stock score reflects solid revenue growth and a strong financial position, as highlighted in the earnings call. However, challenges such as declining margins, reduced cash flow, and high valuation weigh on the score. Technical indicators suggest bearish momentum, although oversold conditions may present a rebound opportunity. Addressing profitability and cost management will be crucial for future performance.

Positive Factors

Clinical Trial Results

Povorcitinib demonstrated a statistically significant difference in HiSCR50 against placebo in both trials, indicating its efficacy in treating moderate/severe hidradenitis suppurativa.

Market Positioning

Povorcitinib could become the first oral selective JAK1 inhibitor approved in hidradenitis suppurativa, offering a new treatment option in the post-biologic setting.

Negative Factors

Competitive Landscape

The data from the Phase 3 trials are inferior to scores for other approved and pipeline competitors.

Financial Projections

The reduction of pipeline estimates and the lowering of the TGR drive the reduction of the price target from $69 to $65.

Incyte (INCY) vs. S&P 500 (SPY)

Market Cap

$11.27B

Dividend YieldN/A

Average Volume (3M)2.25M

Price to Earnings (P/E)214.6

Beta (1Y)0.51

Revenue Growth14.76%

EPS Growth-88.32%

CountryUS

Employees2,617

SectorHealthcare

Sector Strength66

IndustryBiotechnology

Share Statistics

EPS (TTM)0.27

Shares Outstanding193,524,350

10 Day Avg. Volume2,393,453

30 Day Avg. Volume2,254,333

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.83

Price to Cash Flow (P/CF)7.90

P/FCF Ratio8.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$74.29

Price Target Upside27.62% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering18

Incyte Business Overview & Revenue Model

Company DescriptionIncyte Corporation is a biopharmaceutical company based in the United States, primarily focused on the discovery, development, and commercialization of proprietary therapeutics. The company's core products include treatments for oncology and inflammation, with a strong emphasis on developing small-molecule drugs and biologics that address unmet medical needs. Incyte is known for its expertise in medicinal chemistry and its robust pipeline of candidates that target various diseases.

How the Company Makes MoneyIncyte makes money primarily through the sale of its pharmaceutical products, with a significant portion of its revenue generated from its flagship drug, Jakafi (ruxolitinib), which is used for treating myelofibrosis and polycythemia vera. The company also earns revenue from licensing agreements and collaborations with other pharmaceutical companies, where it receives milestone payments and royalties. Additionally, Incyte invests in research and development to expand its product pipeline, ensuring a continuous flow of new and innovative treatments to sustain its growth and profitability.

Incyte Financial Statement Overview

Summary

Incyte demonstrates strong revenue growth and maintains a robust balance sheet with minimal debt. However, the decline in margins and net income, along with reduced cash flow generation, poses challenges for future profitability. The company's financial health remains stable, supported by solid equity and cash reserves, but addressing profitability issues will be crucial for sustained growth.

Income Statement

Positive

Incyte has shown solid revenue growth over the years, with a 15% increase in 2024 compared to the previous year. However, margins have compressed, with the EBIT margin dropping significantly from 16.8% in 2023 to 1.4% in 2024. The gross profit margin remains robust at around 92.6% in 2024, indicating strong product pricing power. Despite the revenue growth, net income has decreased, resulting in a net profit margin of just 0.8% in 2024.

Balance Sheet

Positive

The company maintains a strong financial position with a low debt-to-equity ratio of 0.01 in 2024, indicating minimal leverage. The equity ratio is healthy at 63.3%, reflecting strong shareholder equity relative to total assets. However, the return on equity has decreased to 0.9% in 2024 from 11.5% in 2023, highlighting reduced profitability on equity investments.

Cash Flow

Positive

Incyte's operating cash flow decreased by 32.4% in 2024 compared to 2023, impacting cash-based profitability. Free cash flow also declined, but the company maintains a positive free cash flow to net income ratio, indicating efficient cash generation relative to net income. The operating cash flow to net income ratio, however, shows reduced efficiency at 10.3 in 2024.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.24B	3.70B	3.39B	2.99B	2.67B
	Gross Profit
3.93B	3.44B	3.19B	2.84B	2.54B
	EBIT
61.37M	620.52M	579.44M	585.78M	-240.29M
	EBITDA
408.16M	919.43M	599.64M	630.20M	-178.24M
	Net Income Common Stockholders
32.62M	597.60M	340.66M	948.58M	-295.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.16B	3.66B	3.24B	2.35B	1.80B
	Total Assets
5.44B	6.78B	5.84B	4.93B	3.56B
	Total Debt
37.96M	38.29M	44.64M	34.27M	34.86M
	Net Debt
-1.65B	-3.18B	-2.91B	-2.02B	-1.48B
	Total Liabilities
2.00B	1.59B	1.47B	1.16B	949.65M
	Stockholders Equity
3.45B	5.19B	4.37B	3.77B	2.61B
Cash Flow		Free Cash Flow
249.07M	449.00M	892.11M	568.48M	-311.98M
	Operating Cash Flow
335.34M	496.49M	969.94M	749.49M	-124.60M
	Investing Cash Flow
157.52M	-207.68M	-78.54M	-207.70M	-269.00M
	Financing Cash Flow
-2.02B	-20.03M	-794.00K	6.18M	71.71M

Incyte Technical Analysis

Technical Analysis Sentiment

Negative

Last Price58.21

Price Trends

50DMA

65.63

Negative

100DMA

68.78

Negative

200DMA

67.66

Negative

Market Momentum

MACD

-2.23

Negative

RSI

40.69

Neutral

STOCH

49.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INCY, the sentiment is Negative. The current price of 58.21 is below the 20-day moving average (MA) of 59.90, below the 50-day MA of 65.63, and below the 200-day MA of 67.66, indicating a bearish trend. The MACD of -2.23 indicates Negative momentum. The RSI at 40.69 is Neutral, neither overbought nor oversold. The STOCH value of 49.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INCY.

Incyte Risk Analysis

Incyte disclosed 39 risk factors in its most recent earnings report. Incyte reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Incyte Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GMAB	80 Outperform	$12.09B	11.32	23.16%	―	30.43%	82.29%
EXEL	79 Outperform	$10.12B	20.42	23.13%	―	18.49%	176.71%
BMRN	78 Outperform	$11.35B	26.90	8.05%	―	17.35%	151.40%
UTHR	78 Outperform	$12.81B	11.58	19.23%	―	23.63%	25.66%
INCY	66 Neutral	$11.27B	214.64	0.76%	―	14.76%	-88.32%
ASND	53 Neutral	$9.46B	―	357.68%	―	36.09%	22.96%
Sector *	50 Neutral	$5.51B	2.95	-43.70%	2.78%	16.94%	3.59%

* Healthcare Sector Average

Performance Comparison

INCY

Incyte

58.21

5.86

11.19%

BMRN

BioMarin Pharmaceutical

59.17

-29.46

-33.24%

EXEL

Exelixis

36.19

13.67

60.70%

UTHR

United Therapeutics

284.73

46.80

19.67%

ASND

Ascendis Pharma

165.05

24.88

17.75%

GMAB

Genmab

20.04

-8.66

-30.17%

Incyte Earnings Call Summary

Earnings Call Date: Feb 10, 2025 | % Change Since: -21.48% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong revenue growth driven by products like Jakafi and Opzelura, significant progress in the pipeline with multiple FDA approvals, and a healthy financial position. However, challenges such as Medicare Part D dynamics, increased operating expenses, and potential pricing pressures were noted.

Highlights

Strong Revenue Growth

2024 total revenues grew 15% versus 2023 to reach $4.2 billion. Jakafi net sales were $2.8 billion, growing 8% year-over-year.

Opzelura Performance

Opzelura revenue grew 50% to $508 million in 2024, driven by both new patients and refills in atopic dermatitis and vitiligo in the US, and expanding reimbursement outside the US.

Cash and Share Repurchase

Ended 2024 with $2.2 billion in cash and no debt. Completed a $2 billion share repurchase during 2024.

FDA Approvals and Pipeline Progress

FDA approved Niktimvo for chronic GVHD, and multiple other potential launches and approvals are expected in 2025, contributing potentially $1 billion in incremental revenues by 2029.

Pipeline Development

Plans to initiate at least three Phase 3 studies and expect four pivotal data readouts in 2025. Seven early-stage programs to generate informative data.

Strong Commercial Execution

Total revenues in Q4 2024 were $1.2 billion, up 16% versus the same period last year, driven by strong demand for Jakafi and Opzelura.

Lowlights

Medicare Part D Challenges

Continued challenges with Medicare Part D patients, though improvements were seen as patients returned to paid demand in 2024.

340B Program Impact

Expectations of lower net pricing for Jakafi due to IRA-imposed price increase caps and continued growth in 340B volumes.

High Operating Expenses

Total GAAP R&D expenses for Q4 were $466 million, a 5% increase, with full year 2024 R&D expenses increasing 14% year-over-year.

SG&A Expense Increase

Total GAAP SG&A expenses were $327 million for Q4, an 11% year-over-year increase.

Ruxolitinib XR Delays

Approval for ruxolitinib XR is contingent on the completion of stability studies expected by the end of 2025.

Company Guidance

Incyte's guidance for 2025 emphasizes a strong financial outlook and robust pipeline development. The company projects Jakafi net product revenue to grow 5% to 7% year-over-year, reaching $2.925 to $2.975 billion, driven by demand growth, particularly in polycythemia vera (PV). Opzelura is expected to generate $630 to $670 million, reflecting a 24% to 32% increase, buoyed by continued growth in atopic dermatitis and vitiligo, as well as potential pediatric atopic dermatitis approval. Incyte anticipates four product launches in 2025, including Niktimvo, with these launches potentially contributing $1 billion in incremental revenues by 2029. The company ended 2024 with $2.2 billion in cash and no debt, underscoring its strong financial position to support the anticipated 18 key milestones and continued pipeline advancements.

Incyte Corporate Events

Executive/Board Changes

Incyte Announces Retirement of Executive VP Barry Flannelly

Neutral

Jan 10, 2025

Incyte Corporation announced that Barry P. Flannelly, Executive Vice President and General Manager, North America, has retired from his role as of January 6, 2025. He will continue with the company until July 31, 2025, to aid in the transition of his responsibilities, ensuring a smooth handover to his successor.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.