Ligand Pharma (LGND) AI Stock Analysis

• Market Cap: $2.01B
• Dividend Yield: N/A
• Average Volume (3M): 135.91K
• Price to Earnings (P/E): 48.0
• Beta (1Y): 1.22
• Revenue Growth: 27.28%
• EPS Growth: -101.63%
• Country: US
• Employees: 68
• Sector: Healthcare
• Sector Strength: 71
• Industry: Biotechnology
• EPS (TTM): -0.15
• Shares Outstanding: 19,255,354
• 10 Day Avg. Volume: 137,258
• 30 Day Avg. Volume: 135,907
• PEG Ratio: 0.28
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.46
• Price to Cash Flow (P/CF): 18.30
• P/FCF Ratio: 18.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $148.67
• Price Target Upside: 39.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Ligand Pharma's overall score reflects strong financial growth and a robust cash position, countered by operational challenges impacting margins. Technical analysis suggests caution with mixed signals, while valuation concerns arise from negative P/E. The positive earnings call with promising guidance enhances the outlook.

Positive Factors

Financial Performance

Ligand reported positive financial results for their 4Q24, including revenues of $42.8 million, up from $28.1 million one year ago, and adjusted earnings per share of $1.27 compared with $1.05 in 4Q23.

Revenue Growth

Leading growth in 4Q24 for Ligand were higher royalty revenues, primarily from new products Qarziba and Filspari, as well as from increased shipments of proprietary product Captisol.

Strategic Partnerships

LGND uniquely positions itself as a strategic partner, providing not just royalty capital for products in development but serving as a technology partner and biopharma incubator for innovative treatments.

Negative Factors

Revenue Volatility

There is a long-term theme of choppiness in Captisol sales and contract revenue based on the timing of orders and milestone payments.

Ligand Pharma Business Overview & Revenue Model

Company Description

Ligand Pharmaceuticals, Inc. (LGND) is a biopharmaceutical company that focuses on developing and acquiring technologies that aid pharmaceutical companies in the discovery and development of medicines. The company operates within the healthcare and biotechnology sectors, leveraging its proprietary technology platforms, including Captisol, Pelican Expression Technology, and OmniAb, to support drug discovery and development. Ligand's business model is centered around providing technology solutions and services to pharmaceutical companies to enhance their R&D pipelines.

How the Company Makes Money

Ligand Pharmaceuticals primarily generates revenue through licensing agreements and royalty payments. The company licenses its proprietary technologies to pharmaceutical companies, which use these platforms to develop drugs. In return, Ligand receives milestone payments and royalties on the sales of drugs developed using its technologies. Key revenue streams include royalties from marketed drugs, license fees, and milestone payments from its partners. Significant partnerships with leading pharmaceutical companies further contribute to Ligand's revenue, as these collaborations often involve upfront payments, development milestones, and sales-based royalties.

Ligand Pharma Financial Statement Overview

Summary

Ligand Pharma demonstrates financial resilience with strong liquidity and improved profitability in 2024. The income statement shows volatility but recovery signs, while the balance sheet is stable with low leverage. Robust cash flows support operational flexibility, though operational challenges impact EBIT margins.

Income Statement

Ligand Pharma's income statement shows a volatile revenue trend with a decline from 2021 to 2023 but a recovery in 2024. The 2024 gross profit margin is strong at 100%, indicating effective cost control, but the EBIT margin is negative, reflecting operational challenges. Net profit margin improved significantly from 2023 to 2024, signaling effective management of non-operating expenses.

Balance Sheet

The balance sheet exhibits a solid equity base with a high equity ratio of 88% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.01, suggesting minimal leverage, which is a positive for risk management. Return on equity has improved but remains moderate, reflecting mixed profitability results.

Cash Flow

Cash flow analysis reveals robust free cash flow generation in 2024, with free cash flow to net income ratio indicating efficient conversion of income to cash. Operating cash flow to net income ratio is strong, demonstrating quality earnings. The company has shown substantial free cash flow growth over the previous year, enhancing liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
167.13M	131.31M	196.25M	277.13M	186.42M
	Gross Profit
156.06M	96.27M	143.42M	214.96M	156.00M
	EBIT
-22.61M	11.94M	-25.50M	78.89M	8.55M
	EBITDA
40.79M	101.73M	54.41M	133.16M	69.05M
	Net Income Common Stockholders
-4.03M	52.15M	-5.22M	57.14M	-2.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.17M	170.31M	211.87M	341.11M	411.19M
	Total Assets
941.77M	787.22M	762.67M	1.30B	1.36B
	Total Debt
7.11M	6.17M	87.75M	336.26M	454.53M
	Net Debt
-65.20M	-16.79M	87.70M	316.74M	406.91M
	Total Liabilities
111.33M	86.30M	165.18M	479.75M	652.76M
	Stockholders Equity
830.44M	700.91M	597.49M	821.63M	709.52M
Cash Flow		Free Cash Flow
95.23M	-4.27M	119.93M	70.04M	50.13M
	Operating Cash Flow
97.05M	49.58M	137.85M	78.80M	54.59M
	Investing Cash Flow
-143.66M	-11.68M	163.62M	30.52M	231.65M
	Financing Cash Flow
97.14M	-59.95M	-275.99M	-137.76M	-310.55M

Ligand Pharma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 106.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGND, the sentiment is Negative. The current price of 106.59 is above the 20-day moving average (MA) of 105.77, below the 50-day MA of 111.37, and below the 200-day MA of 108.14, indicating a bearish trend. The MACD of -2.04 indicates Positive momentum. The RSI at 40.56 is Neutral, neither overbought nor oversold. The STOCH value of 29.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGND.

Ligand Pharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LGND	64 Neutral	$2.01B	48.01	-0.53%	―	27.28%	-101.63%
TARS	54 Neutral	$1.93B	―	-54.83%	―	948.62%	33.12%
MIRM	48 Neutral	$1.94B	―	-37.08%	―	80.76%	53.98%
Sector *	48 Neutral	$6.46B	1.17	-48.25%	2.67%	19.50%	0.61%
APGE	42 Neutral	$1.89B	―	-33.22%	―	―	-94.92%
BLTE	41 Neutral	$1.80B	―	-30.60%	―	―	―
BHVN	25 Underperform	$1.80B	―	-198.83%	―	―	-65.63%

Ligand Pharma Corporate Events

Ligand Pharma Enters $75M Agreement with Castle Creek

On February 24, 2025, Ligand Pharmaceuticals entered into a $75 million Purchase and Sale Agreement with Castle Creek Biosciences and co-investors to support the Phase 3 clinical study of D-Fi, a gene therapy candidate for dystrophic epidermolysis bullosa (DEB). Ligand invested $50 million, receiving a high single-digit royalty on worldwide sales of D-Fi and warrants to purchase shares of Castle Creek. This collaboration aims to advance an orphan drug-designated therapy for a serious unmet medical need, reflecting Ligand’s commitment to investing in groundbreaking treatments and expanding its portfolio of revenue-generating assets.