We assign a fundamental rating of 6 out of 10 to LGND. LGND was compared to 191 industry peers in the Pharmaceuticals industry. LGND scores excellent on profitability, but there are some minor concerns on its financial health. LGND is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make LGND a good candidate for growth investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year LGND was profitable.
In the past year LGND had a positive cash flow from operations.
In multiple years LGND reported negative net income over the last 5 years.
Each year in the past 5 years LGND had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 3.29%, LGND belongs to the best of the industry, outperforming 83.25% of the companies in the same industry.
The Return On Equity of LGND (5.11%) is better than 83.25% of its industry peers.
Looking at the Return On Invested Capital, with a value of 1.58%, LGND is in the better half of the industry, outperforming 78.53% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LGND is significantly below the industry average of 12.83%.
The 3 year average ROIC (1.12%) for LGND is below the current ROIC(1.58%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	3.29%
ROE	5.11%
ROIC	1.58%

ROA(3y)0.61%

ROA(5y)1.2%

ROE(3y)0.46%

ROE(5y)1.58%

ROIC(3y)1.12%

ROIC(5y)1.78%

1.3 Margins

Looking at the Profit Margin, with a value of 19.34%, LGND belongs to the top of the industry, outperforming 90.58% of the companies in the same industry.
LGND has a Operating Margin of 11.48%. This is amongst the best in the industry. LGND outperforms 84.29% of its industry peers.
In the last couple of years the Operating Margin of LGND has declined.
LGND's Gross Margin of 94.27% is amongst the best of the industry. LGND outperforms 96.34% of its industry peers.
LGND's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	11.48%
PM (TTM)	19.34%
GM	94.27%

OM growth 3Y-21.5%

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y6.37%

GM growth 5Y0.62%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LGND is destroying value.
The number of shares outstanding for LGND has been increased compared to 1 year ago.
Compared to 5 years ago, LGND has more shares outstanding
LGND has a worse debt/assets ratio than last year.

2.2 Solvency

LGND has an Altman-Z score of 5.94. This indicates that LGND is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.94, LGND is doing good in the industry, outperforming 76.44% of the companies in the same industry.
The Debt to FCF ratio of LGND is 14.48, which is on the high side as it means it would take LGND, 14.48 years of fcf income to pay off all of its debts.
LGND has a better Debt to FCF ratio (14.48) than 77.49% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that LGND is not too dependend on debt financing.
LGND's Debt to Equity ratio of 0.47 is on the low side compared to the rest of the industry. LGND is outperformed by 62.30% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.47
Debt/FCF	14.48
Altman-Z	5.94

ROIC/WACC0.17

WACC9.38%

2.3 Liquidity

LGND has a Current Ratio of 24.69. This indicates that LGND is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of LGND (24.69) is better than 93.72% of its industry peers.
A Quick Ratio of 24.30 indicates that LGND has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 24.30, LGND belongs to the top of the industry, outperforming 92.67% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	24.69
Quick Ratio	24.3

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 25.26% over the past year.
The Earnings Per Share has been growing by 13.44% on average over the past years. This is quite good.
LGND shows a strong growth in Revenue. In the last year, the Revenue has grown by 64.83%.
LGND shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.80% yearly.

EPS 1Y (TTM)25.26%

EPS 3Y-3.83%

EPS 5Y13.44%

EPS Q2Q%67.93%

Revenue 1Y (TTM)64.83%

Revenue growth 3Y-15.51%

Revenue growth 5Y6.8%

Sales Q2Q%67.71%

3.2 Future

Based on estimates for the next years, LGND will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.28% on average per year.
LGND is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.13% yearly.

EPS Next Y30.63%

EPS Next 2Y21.4%

EPS Next 3Y19.77%

EPS Next 5Y15.28%

Revenue Next Year48.19%

Revenue Next 2Y27.54%

Revenue Next 3Y24.22%

Revenue Next 5Y20.13%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 27.59 indicates a quite expensive valuation of LGND.
Based on the Price/Earnings ratio, LGND is valued a bit cheaper than 78.01% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. LGND is around the same levels.
Based on the Price/Forward Earnings ratio of 23.90, the valuation of LGND can be described as rather expensive.
Based on the Price/Forward Earnings ratio, LGND is valued a bit cheaper than the industry average as 75.39% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 24.26. LGND is around the same levels.

		Industry Rank	Sector Rank
PE	27.59
Fwd PE	23.9

4.2 Price Multiples

77.49% of the companies in the same industry are more expensive than LGND, based on the Enterprise Value to EBITDA ratio.
74.87% of the companies in the same industry are more expensive than LGND, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	128.69
EV/EBITDA	51.83

4.3 Compensation for Growth

LGND's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LGND has a very decent profitability rating, which may justify a higher PE ratio.
LGND's earnings are expected to grow with 19.77% in the coming years. This may justify a more expensive valuation.