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Here's Why You Should Retain OPKO Health (OPK) Stock for Now
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OPKO Health, Inc. (OPK - Free Report) is well-poised for growth in the coming quarters, courtesy of its potential in RAYALDEE. The optimism led by solid third-quarter 2022 performance, along with a few regulatory approvals, is expected to contribute further. Stiff competition and concerns regarding overdependence on RAYALDEE persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 61.5% compared with 8.1% decline of the industry and 6.9% fall of the S&P 500.
The renowned multinational biopharmaceutical and diagnostics company has a market capitalization of $934.9 million. It projects 23.3% growth for 2023 and expects to maintain its strong performance. OPKO Health’s P/B ratio of 0.6 compares favorably with the industry’s 2.8.
Image Source: Zacks Investment Research
Let’s delve deeper.
Potential in RAYALDEE: We are upbeat about OPKO Health’s RAYALDEE business. During the third quarter of 2022, OPKO Health began to receive royalty payments from sales of RAYALDEE by CSL Vifor in Germany and Switzerland. The company expects these payments to increase as CSL Vifor launches RAYALDEE in additional territories throughout Europe. In February, OPKO Health announced that Vifor Fresenius Medical Care Renal Pharma had initiated the commercial launch of RAYALDEE (extended-release calcifediol) in Germany.
Regulatory Approvals: We are optimistic about OPKO Health’s progress on the regulatory front for its products. In February, the company and Pfizer Inc. gained marketing authorization from the European Commission for the next-generation long-acting recombinant human growth hormone NGENLA (somatrogon).
At the time of third-quarter 2022 earnings release, OPKO Health confirmed that NGENLA is the first once-weekly product approved for the treatment of pediatric growth hormone deficiency in Japan, Canada, Australia, Taiwan, UAE and Brazil.
Strong Q3 Results: OPKO Health’s better-than-expected third-quarter 2022 revenues buoy our optimism. OPKO Health’s buyout of ModeX Therapeutics, Inc. continues to benefit it as the latter progresses its proprietary immunotherapy pipeline, raising our optimism. The company’s continued strength in its women's health and oncology businesses also augurs well.
Downsides
Stiff Competition: The pharmaceutical, diagnostic and laboratory testing industries are highly competitive and require an ongoing, extensive search for technological innovation. Numerous companies, including major pharmaceutical companies, specialty pharmaceutical companies and specialized biotechnology companies, are engaged in the development, manufacture and marketing of pharmaceutical products competitive with those that OPKO Health intends to commercialize itself and through its partners.
Overdependence on RAYALDEE: OPKO Health’s RAYALDEE is the company’s only pharmaceutical product approved for marketing in the United States. The company’s ability to generate revenues from product sales and achieve profitability substantially depends on its ability to effectively commercialize RAYALDEE. The failure to successfully commercialize RAYALDEE would have a material adverse effect on the company’s business.
Estimate Trend
OPKO Health is witnessing a flat estimate revision trend. In the past 90 days, the Zacks Consensus Estimate for its earnings has been maintained at a loss of 43 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $167.5 million, suggesting a 58.3% fall from the year-ago quarter’s reported number.
This compares to our fourth-quarter 2022 revenue estimate of $163.7 million, suggesting a 59.2% decline from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has gained 3.3% against the industry’s 20.2% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 44.2% against the industry’s 4.5% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 19.6% against the industry’s 4.5% decline over the past year.
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Here's Why You Should Retain OPKO Health (OPK) Stock for Now
OPKO Health, Inc. (OPK - Free Report) is well-poised for growth in the coming quarters, courtesy of its potential in RAYALDEE. The optimism led by solid third-quarter 2022 performance, along with a few regulatory approvals, is expected to contribute further. Stiff competition and concerns regarding overdependence on RAYALDEE persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 61.5% compared with 8.1% decline of the industry and 6.9% fall of the S&P 500.
The renowned multinational biopharmaceutical and diagnostics company has a market capitalization of $934.9 million. It projects 23.3% growth for 2023 and expects to maintain its strong performance. OPKO Health’s P/B ratio of 0.6 compares favorably with the industry’s 2.8.
Image Source: Zacks Investment Research
Let’s delve deeper.
Potential in RAYALDEE: We are upbeat about OPKO Health’s RAYALDEE business. During the third quarter of 2022, OPKO Health began to receive royalty payments from sales of RAYALDEE by CSL Vifor in Germany and Switzerland. The company expects these payments to increase as CSL Vifor launches RAYALDEE in additional territories throughout Europe.
In February, OPKO Health announced that Vifor Fresenius Medical Care Renal Pharma had initiated the commercial launch of RAYALDEE (extended-release calcifediol) in Germany.
Regulatory Approvals: We are optimistic about OPKO Health’s progress on the regulatory front for its products. In February, the company and Pfizer Inc. gained marketing authorization from the European Commission for the next-generation long-acting recombinant human growth hormone NGENLA (somatrogon).
At the time of third-quarter 2022 earnings release, OPKO Health confirmed that NGENLA is the first once-weekly product approved for the treatment of pediatric growth hormone deficiency in Japan, Canada, Australia, Taiwan, UAE and Brazil.
Strong Q3 Results: OPKO Health’s better-than-expected third-quarter 2022 revenues buoy our optimism. OPKO Health’s buyout of ModeX Therapeutics, Inc. continues to benefit it as the latter progresses its proprietary immunotherapy pipeline, raising our optimism. The company’s continued strength in its women's health and oncology businesses also augurs well.
Downsides
Stiff Competition: The pharmaceutical, diagnostic and laboratory testing industries are highly competitive and require an ongoing, extensive search for technological innovation. Numerous companies, including major pharmaceutical companies, specialty pharmaceutical companies and specialized biotechnology companies, are engaged in the development, manufacture and marketing of pharmaceutical products competitive with those that OPKO Health intends to commercialize itself and through its partners.
Overdependence on RAYALDEE: OPKO Health’s RAYALDEE is the company’s only pharmaceutical product approved for marketing in the United States. The company’s ability to generate revenues from product sales and achieve profitability substantially depends on its ability to effectively commercialize RAYALDEE. The failure to successfully commercialize RAYALDEE would have a material adverse effect on the company’s business.
Estimate Trend
OPKO Health is witnessing a flat estimate revision trend. In the past 90 days, the Zacks Consensus Estimate for its earnings has been maintained at a loss of 43 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $167.5 million, suggesting a 58.3% fall from the year-ago quarter’s reported number.
This compares to our fourth-quarter 2022 revenue estimate of $163.7 million, suggesting a 59.2% decline from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 3.3% against the industry’s 20.2% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 44.2% against the industry’s 4.5% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 19.6% against the industry’s 4.5% decline over the past year.