Biotech stocks are an area of the market that can deliver massive returns to investors, however, this potential reward does come with massive risk.
Where do these large-cap biotech stocks go from here? Is the rapid upward run justified? Let’s take a closer look at BIIB and BNTX to get a better sense of why they have climbed so high so quickly and what could be next.
BNTX is a biotech business that makes and commercializes immunotherapies that treat cancer as well as additional diseases. Headquartered in Mainz, Germany, BNTX has a remarkably low forward P/E ratio of 7.77. This figure is all the more impressive considering the stock is trading less than $30 below its 52-week high of $252.78. The stock’s 52-week low is a mere $48.93.
BNTX has been on fire the past couple of weeks and the past month. Rewind all the way back six months and you will find the stock was soaring then as well. BNTX is up an impressive 106% across the prior half-year. For the prior year as a whole, the stock is up nearly 340%.
BNTX jumped partially as a result of the Biden administration’s announcement that it will be purchasing half a billion doses of the company’s coronavirus vaccine. The doses will be used in middle-income and low-income countries in an effort to stop the spread of the virus. BNTX developed the vaccine with the assistance of scientists at Pfizer (PFE). This is one of three COVID-19 vaccines authorized for use by the Food and Drug Administration (FDA).
BNTX has a B POWR Rating grade. The stock has Bs in the Sentiment and Value components along with Cs in the Growth and Stability components. Click here to find out how BNTX fares in the remainder of the POWR Ratings components such as Quality and Momentum.
Out of 487 stocks in the Biotech space, BNTX is ranked 18th. You can find out more about the stocks in this segment by clicking here.
Headquartered in Cambridge, MA, BIIB is one of the top biotech businesses in the world. BIIB’s primary point of focus is creating innovative therapies for the treatment of serious neurodegenerative and neurological diseases. As an example, BIIB is attempting to create treatments and cures for dementia, multiple sclerosis, Parkinson’s disease, and Alzheimer’s disease.
BIIB has a forward P/E ratio of 21.48, meaning it might be a bit overvalued at its current trading price of just under $410. However, the stock is within $60 of its 52-week high so the high forward P/E ratio is somewhat justifiable. BIIB’s 52-week low is $223.25.
BIIB is a POWR Ratings success with a B overall rating indicating it is a Buy. The stock has an A grade in the Value component along with a B Quality component grade. BIIB has Cs in the Sentiment and Stability components of the POWR Ratings. Investors who are curious as to how BIIB fares in the rest of the POWR Ratings components such as Momentum and Growth can find out by clicking here.
Of the nearly 500 publicly traded companies in the Biotech space, BIIB slots in at 26th overall. You can find out more about the stocks in this sector by clicking here.
Of the 31 analysts who have issued BIIB recommendations, six view the stock as a Strong Buy, four view it as a Buy, 17 view it as a Hold, two view it as a Sell, and two view it as a Strong Sell. It is interesting to note the stock’s average upside potential has increased 9% across the prior 52 weeks.
BNTX shares were trading at $220.58 per share on Monday afternoon, down $17.97 (-7.53%). Year-to-date, BNTX has gained 170.58%, versus a 14.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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