Grifols SA (GRFS) AI Stock Analysis

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Grifols SA

(NASDAQ:GRFS)

67Neutral

Grifols' stock score reflects strong financial performance with notable revenue growth and operational efficiency, tempered by high leverage and cash flow challenges. Technical analysis indicates a bearish sentiment, and the valuation appears relatively high. The recent earnings call was optimistic yet highlighted ongoing financial challenges. Overall, the stock presents potential for growth but carries financial risks that need addressing.

Grifols SA (GRFS) vs. S&P 500 (SPY)

Market Cap

$5.01B

Dividend YieldN/A

Average Volume (3M)1.36M

Price to Earnings (P/E)27.6

Beta (1Y)1.13

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees23,833

SectorHealthcare

Sector Strength74

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.25

Shares Outstanding261,425,100

10 Day Avg. Volume1,091,111

30 Day Avg. Volume1,355,007

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.77

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Grifols SA Business Overview & Revenue Model

Company DescriptionGrifols, S.A. engages in the procurement, manufacture, preparation, and sale of therapeutic products, primarily hemoderivatives. The company operates through Bioscience, Hospital, Diagnostic, Bio Supplies, and Others divisions. The Bioscience division researches, develops, produces, and markets plasma-derived medicines and other innovative solutions to treat patients with chronic, rare, prevalent, and life-threatening diseases. It offers immunoglobulins, alpha-1 antitrypsin, albumin, clotting factors, and hyperimmune globulins. The Hospital division offers non-biological pharmaceutical products and medical supplies clinical nutrition, intravenous therapy, and medical devices. The Diagnostic division researches, develops, produces, and commercializes diagnostic products that span the healthcare continuumfrom prevention, screening, diagnosis, and prognosis to disease and treatment monitoringto serve professionals. The Bio Supplies division provides biological materials for life-science research, clinical trials, and for manufacturing pharmaceutical and diagnostic products. Its products and services are used by healthcare providers to diagnose and treat patients with hemophilia, immune deficiencies, infectious diseases, and other medical conditions. The company serves public and private customers; and wholesalers, distributors, group purchasing organizations, blood banks, hospitals and care institutions, and national health systems. Grifols, S.A. has a technology collaboration agreement with Mondragon. The company was founded in 1940 and is headquartered in Barcelona, Spain.

How the Company Makes MoneyGrifols SA primarily generates revenue through its Bioscience division, which accounts for the bulk of its earnings by producing plasma-derived therapies used to treat rare, chronic, and life-threatening conditions. The company collects plasma from its extensive network of donation centers and processes it into various therapeutic products. The Diagnostic division contributes to revenue by providing diagnostic solutions, including instruments, reagents, and software for blood banks and transfusion centers. The Hospital division offers hospital pharmacy solutions, such as intravenous solutions and nutrition products. Additionally, the Bio Supplies division generates income by supplying biological materials for non-therapeutic uses. Grifols also benefits from strategic partnerships and collaborations that enhance its research capabilities and expand its market reach.

Grifols SA Financial Statement Overview

Summary

Grifols SA shows robust revenue growth and stable operational margins, indicating effective cost management. However, high leverage and negative free cash flow pose risks, underscoring the need to enhance profitability and cash flow management. The company is on a positive trajectory but must address balance sheet and cash flow weaknesses to sustain long-term growth.

Income Statement

Positive

Grifols SA has demonstrated robust revenue growth from 2022 to 2023, with a notable 8.7% increase. The gross profit margin remains stable at around 35.2%, and the company’s net profit margin has improved to 0.9%, although it is still relatively low. The EBIT margin is at 11.2%, indicating efficient core operations, while EBITDA margin is strong at 17.9%, reflecting solid operational cash generation capacity.

Balance Sheet

Positive

The debt-to-equity ratio stands at 1.74, suggesting a substantial reliance on debt financing, which poses a financial risk. However, the equity ratio is moderate at 27.2%, providing a buffer against liabilities. Return on Equity (ROE) has decreased to 1.0%, indicating a need for improved profitability relative to equity.

Cash Flow

Neutral

The free cash flow has improved but remains negative, highlighting cash management challenges. The operating cash flow to net income ratio is strong at 3.51, indicating healthy cash generation relative to net income. However, the free cash flow to net income ratio is negative, reflecting ongoing cash flow constraints.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
3.56B	6.59B	6.06B	4.93B	5.34B	5.10B
	Gross Profit
1.42B	2.32B	2.23B	1.96B	2.26B	2.34B
	EBIT
540.08M	737.92M	805.68M	595.06M	996.13M	1.13B
	EBITDA
760.02M	1.18B	1.16B	922.47M	1.37B	1.49B
	Net Income Common Stockholders
107.68M	59.31M	208.28M	265.33M	618.55M	625.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
357.49M	645.72M	591.24M	2.68B	590.51M	2.47B
	Total Assets
5.81B	21.44B	21.53B	19.23B	15.27B	15.54B
	Total Debt
2.96B	10.12B	9.75B	9.32B	6.91B	7.11B
	Net Debt
2.62B	9.59B	9.20B	8.67B	6.33B	6.36B
	Total Liabilities
4.14B	13.47B	13.08B	11.09B	8.55B	8.70B
	Stockholders Equity
1.66B	5.83B	6.13B	6.10B	5.11B	4.82B
Cash Flow		Free Cash Flow
268.64M	-87.14M	-386.43M	281.89M	747.78M	156.63M
	Operating Cash Flow
456.00M	208.28M	-10.87M	596.98M	1.11B	568.93M
	Investing Cash Flow
-338.28M	-397.64M	-1.98B	-29.39M	-858.12M	-548.79M
	Financing Cash Flow
-1.51B	186.04M	-173.49M	1.47B	-354.40M	-332.36M

Grifols SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.52

Price Trends

50DMA

7.48

Negative

100DMA

7.60

Negative

200DMA

7.95

Negative

Market Momentum

MACD

-0.15

Positive

RSI

32.24

Neutral

STOCH

9.59

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRFS, the sentiment is Negative. The current price of 6.52 is below the 20-day moving average (MA) of 7.36, below the 50-day MA of 7.48, and below the 200-day MA of 7.95, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 32.24 is Neutral, neither overbought nor oversold. The STOCH value of 9.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRFS.

Grifols SA Risk Analysis

Grifols SA disclosed 53 risk factors in its most recent earnings report. Grifols SA reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Grifols SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNY	79 Outperform	$120.19B	21.31	7.34%	2.89%	-4.57%	2.96%
GILD	75 Outperform	$131.21B	275.16	2.28%	2.94%	6.16%	-91.54%
GSK	69 Neutral	$65.80B	21.36	19.11%	4.44%	6.28%	-47.11%
PFE	68 Neutral	$127.55B	15.96	9.05%	7.51%	8.77%	272.80%
GRFS	67 Neutral	$5.01B	27.63		―	―	―
BMY	60 Neutral	$109.35B	―	-39.10%	4.50%	7.32%	-214.24%
Sector *	48 Neutral	$6.36B	1.28	-45.04%	2.64%	19.24%	1.69%

* Healthcare Sector Average

Performance Comparison

GRFS

Grifols SA

6.52

-0.04

-0.61%

BMY

Bristol-Myers Squibb

50.46

4.44

9.65%

GILD

Gilead Sciences

101.40

35.79

54.55%

GSK

GlaxoSmithKline

33.60

-5.51

-14.09%

PFE

Pfizer

21.59

-2.74

-11.26%

SNY

Sanofi

49.66

5.08

11.40%

Grifols SA Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -11.65% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a strong performance in revenue growth and EBITDA improvement, with strategic achievements in innovation and deleveraging. However, significant financial expenses and ongoing challenges in free cash flow generation present concerns. The situation in China also requires careful monitoring.

Highlights

Strong Revenue Growth

Revenue in the third quarter totaled nearly EUR 1.8 billion, representing a 12.4% increase on a constant currency basis over the previous year, and year-to-date revenues reached EUR 5.2 billion, representing a 9.1% increase.

Significant EBITDA Improvement

Adjusted EBITDA for the quarter came in at EUR 462 million with a margin of nearly 26%, an improvement of 26.7% at constant currency from the previous year.

Successful Deleveraging

The company reduced its leverage ratio to 5.1x from 6.8x in the first quarter, showing strong momentum in deleveraging efforts.

Innovative Progress in Biopharma

The IG franchise showed double-digit growth with a remarkable 52% increase in subcutaneous IG year-to-date on a constant currency basis.

Strategic Contract Awarded

Grifols was awarded a U.S. BARDA contract worth up to $135 million over the next 6 years to develop a recombinant polyclonal antibody therapy.

Lowlights

High Financial Expenses

Financial expenses in the P&L are higher than the previous year due to noncash one-off impacts and higher cash interest expenses.

Pressure on Free Cash Flow

While there was an improvement, free cash flow generation remains a challenge, with expectations for breakeven only by year-end.

Uncertain Economic Conditions in China

Some concerns were raised regarding potential economic sensitivity and competition in the Chinese market, although current demand remains strong.

Company Guidance

During Grifols' Q3 2024 earnings call, several key financial metrics and strategic updates were discussed. The company reported a 12.4% increase in third-quarter revenue totaling nearly EUR 1.8 billion, with year-to-date revenues reaching EUR 5.2 billion, marking a 9.1% increase. Adjusted EBITDA for the quarter stood at EUR 462 million, equating to a margin of nearly 26% and an improvement of 26.7% from the prior year. Free cash flow improved to EUR 127 million, and the leverage ratio was reduced to 5.1x from 6.8x in the first quarter. The executives expressed confidence in meeting full-year guidance, supported by robust global demand and decreased plasma costs. Additionally, Grifols achieved significant advancements in innovation, including a U.S. BARDA contract and progress in regulatory processes for fibrinogen. They also highlighted enhancements in corporate governance and strategic management transitions, notably with the appointment of Rahul Srinivasan as CFO, aimed at improving financial discipline and operational efficiency.

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.