Latest news with #AvishekDas
Forbes
27-06-2025
- Business
- Forbes
40% Upside For Merck Stock?
INDIA - 2025/05/20: In this photo illustration, a MERCK logo is seen displayed on a smartphone and ... More in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) Although Merck (NYSE:MRK) is confronted with the unavoidable Keytruda patent cliff in 2028, the company is strategically positioning itself for further growth by diversifying and expanding its pipeline. Earlier this month, we highlighted how Keytruda is a ticking time bomb for Merck stock. In this analysis, we explore the potential upside for Merck despite its short-term hurdles. If you are looking for upside with less volatility compared to individual stocks, the Trefis High-Quality portfolio offers an alternative—it has outperformed the S&P 500 and achieved returns over 91% since its inception. Separately, check out – What's Happening With BBAI Stock? Pipeline Depth: $50 Billion in Potential While oncology contributes a significant part to Merck's revenue, its top-selling drug will confront biosimilar challenges after 2028. Nevertheless, Merck is set for substantial growth, with 20 new "blockbuster" drugs under development that collectively possess a sales potential of $50 billion. This strong pipeline indicates a strategic change from the company's dependence on Keytruda, seeking to create varied revenue streams across different therapeutic domains. Several promising candidates are fueling this potential: Recently Launched Drugs and Vaccines: In addition to the pipeline, Merck's relatively recent drugs and vaccines are already making a significant contribution to revenue: This strategic emphasis on a broad and impactful pipeline, alongside the robust performance of new launches, positions Merck for sustainable growth and a decreased reliance on a single product. The figures suggest that Merck's diversification strategy might be effective. If Winrevair meets its peak sales target and the wider pipeline realizes its potential, the company could significantly counterbalance Keytruda's decline and witness sales growth. The timeline is tight—most growth drivers need to materialize before 2028—but the groundwork is established. Also, see – Nektar Therapeutics Is Up 150%: What's Happening With NKTR Stock? Investment Implications Merck's upside potential depends on its capability to execute across several vital areas: successfully moving its pipeline forward, expanding into new regions, and making strategic acquisitions. The company has a demonstrated history of identifying and developing blockbuster drugs, and its current strategy directly addresses its previous dependence on Keytruda. Merck's acquisition strategy clearly reflects its commitment to constructing a portfolio extending beyond oncology. For instance, the recent $680 million acquisition of Harpoon Therapeutics enhances its expanding immunotherapy portfolio. Likewise, the Acceleron deal instantly boosted revenue with Winrevair. This tactic of acquiring late-stage assets offers both immediate revenue and long-term growth potential. With a cash reserve exceeding $9 billion, Merck is well-positioned to pursue additional acquisitions that can drive revenue expansion. For investors, this represents a compelling turnaround narrative: a company transitioning effectively from single-drug reliance to diversified growth. The upcoming 12 to 18 months will be pivotal in determining if Merck can fulfill its pipeline commitments and sustain growth momentum past 2028. In addition, look at – What's Happening With Amgen Stock? Valuation and Upside Potential Currently, MRK stock trades at around $80, valuing the company at 3.2 times its trailing revenues. This falls below its three-year average price-to-sales (P/S) ratio of 4.4 times, which suggests that investors have likely considered some of the obstacles Merck might encounter beyond 2028, along with near-term worries regarding its Gardasil vaccine. Our dashboard on Merck's valuation ratios provides further insights. While Gardasil is facing temporary challenges in China, sales have risen in every other region. The market pause in China appears to be temporary, providing additional upside as demand stabilizes. If MRK stock were to revert to its historical P/S ratio, it would result in a price exceeding $110, indicating nearly 40% upside potential. This situation with Merck underscores the critical necessity of establishing a resilient investment portfolio that effectively balances risk and reward. Merck's scenario serves as a potent reminder that even highly successful pharmaceutical companies inevitably encounter patent cliffs, which can drastically shift their growth paths. Merck's dependence on Keytruda, while currently its greatest strength, also poses its most substantial near-term risk. Although Merck is strategically addressing this with a pipeline that entails a $50 billion potential, there are significant risks associated with such a transition. Investors must evaluate the company's present strong performance against the certainty of forthcoming challenges, making diversification across multiple stocks essential for managing this type of concentrated risk. Our Trefis High Quality (HQ) portfolio exemplifies this strategy, having significantly outperformed the S&P 500, Nasdaq, and Russell 2000, achieving over 91% returns since its inception. Balancing risk and reward is precisely why diversifying across multiple stocks is vital.
Forbes
05-06-2025
- Business
- Forbes
Gitlab Stock Earnings To Beat Expectations?
INDIA - 2024/12/17: In this photo illustration, a Gitlab logo is seen displayed on a smartphone and ... More in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) GitLab (NASDAQ:GTLB), a firm that offers tools to assist teams in managing their software development lifecycle, is anticipated to release its Q1 results on June 10. Consensus forecasts indicate revenues nearing $213 million for the quarter, marking a 26% increase compared to the previous year, while earnings are estimated to be around $0.15 per share, nearly 5 times higher than last year. Historical data imply that the stock has a strong probability of rising after earnings, as GitLab has experienced a positive one-day return post-earnings about 75% of the time over the past three years. The company currently has a market capitalization of $7.4 billion. Revenue over the past twelve months was $759 million, and it reported an operational loss of $-143 million, along with a net income of $-6.3 million. Therefore, if you are looking for upside with less volatility compared to individual stocks, the Trefis High Quality portfolio offers an option, having surpassed the S&P 500 and yielded returns over 91% since its inception. See earnings reaction history of all stocks Here are some insights regarding one-day (1D) post-earnings returns: Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns post-earnings is compiled along with the statistics in the table below. GTLB 1D, 5D, and 21D Post Earnings Return A relatively lower-risk strategy (although ineffective if the correlation is weak) involves analyzing the correlation between short-term and medium-term returns following earnings, identifying the pair with the strongest correlation, and executing the suitable trade. For instance, if the 1D and 5D returns exhibit the highest correlation, a trader might consider taking a "long" position for the next five days if the 1D post-earnings return is positive. Below is some correlation data derived from a 5-year and a 3-year (more recent) analysis. Note that the correlation 1D_5D represents the relationship between 1D post-earnings returns and the following 5D returns. GTLB Correlation Between 1D, 5D, and 21D Historical Returns At times, the performance of peers can impact stock reactions following earnings. In fact, the pricing might start before the earnings are released. Below is some historical data regarding GitLab stock's past post-earnings performance compared to the performance of peers reporting earnings just prior to GitLab. To ensure fairness, peer stock returns also reflect post-earnings one-day (1D) returns. GTLB Correlation With Peer Earnings Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (comprising all three, the S&P 500, S&P mid-cap, and Russell 2000), providing robust returns for investors. Additionally, if you are seeking a smoother experience with greater upside than an individual stock like GitLab, consider the High Quality portfolio, which has outperformed the S&P, achieving returns exceeding 91% since its inception.
Forbes
02-06-2025
- Business
- Forbes
Merck Stock's Ticking Keytruda Time Bomb
INDIA - 2025/05/20: In this photo illustration, a MERCK logo is seen displayed on a smartphone and ... More in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) Merck's (NYSE:MRK) top-selling drug – Keytruda's – impressive recent growth tells a compelling story, but it's one with a predictable ending. The pharmaceutical giant's remarkable performance is largely attributed to the phenomenal success of Keytruda, its blockbuster oncology drug. However, beneath this success lies a growing concern: the sustainability of this growth trajectory, particularly as competition intensifies in the oncology space. Keytruda has been nothing short of a financial juggernaut for Merck. Sales have skyrocketed an astounding 72% from $17 billion in 2021 to $29 billion last year, single-handedly driving Merck's double-digit average revenue growth over the past three years. The drug now accounts for a substantial 46% of the company's total revenues. That's big. Nearly half of the company's sales comes from a single drug—a level of dependency that would make any investor pause. It's precisely why sector diversification is a key factor we consider for our High Quality (HQ) portfolio. This strategic focus on ensuring a healthy mix of companies across sectors has enabled the HQ portfolio to outperform the S&P 500, achieving returns greater than 91% since its inception. Separately, see – Buy, Sell, or Hold HIMS Stock? There's no guessing about Keytruda's future trajectory: its U.S. market exclusivity ends in 2028, leading to inevitable biosimilar competition. This isn't speculation—it's a certainty that will fundamentally reshape Merck's financial landscape. The larger a drug's sales, the more challenging it becomes for a company to offset the revenue gap once its patent expires. Our estimates suggest Keytruda's sales will peak around $36 billion by 2028, but could these annual sales fall to $20 billion or even under $15 billion within the next four to five years? It's highly probable. Make no mistake: sales fall sharply when a biosimilar enters the market. The pharmaceutical industry provides stark examples of this disruptive force. AbbVie's Humira, another former blockbuster, lost nearly 60% of its sales in just a couple of years, plummeting from a peak of $21 billion in 2022 to under $9 billion last year. Similarly, Roche's Herceptin lost its market exclusivity in the U.S. in 2019 and saw its sales plunge from $7 billion in 2018 to $3.7 billion in 2020. These examples demonstrate the powerful and predictable impact of biosimilar competition—a reality that Merck will soon face. Can Merck maintain sales growth when its biggest drug's sales are projected to decline significantly? Currently, the answer is "unlikely." While the pharmaceutical landscape can change rapidly with strategic acquisitions or licensing deals for promising drugs, the fundamental challenge remains: Merck's Keytruda-fueled growth story is set to slow, and that shift will likely occur around 2028. When this period of high growth ends, Merck's valuation is expected to drop significantly. In fact, to some extent, investors have already started to account for this reality, as evidenced by a 40% decline in MRK stock over the last twelve months. Of course, other factors are also fueling this decline, primarily the drop in Gardasil sales—Merck's second best-selling drug—due to slowing demand in China. The company faces the daunting task of either finding replacement revenue streams in the next three years or accepting a new reality of slower, or even falling, sales. This scenario underscores the importance of building a resilient investment portfolio that balances risk and reward. Merck's situation serves as a reminder that even the most successful pharmaceutical companies face inevitable patent cliffs that can dramatically alter their growth trajectories. The Keytruda dependency represents both Merck's greatest current strength and its most significant near-term vulnerability. Investors must weigh the company's current robust performance against the certainty of coming challenges, making diversification across multiple stocks crucial for managing this type of concentrated risk. Our Trefis High Quality (HQ) portfolio exemplifies this approach, having significantly outperformed the S&P 500, Nasdaq, and Russell 2000, clocking in over 91% returns since inception. Balancing risk and reward is precisely why diversifying across multiple stocks is crucial.
Forbes
26-05-2025
- Business
- Forbes
Should You Buy MRK Stock At $80?
INDIA - 2025/05/20: In this photo illustration, a MERCK logo is seen displayed on a smartphone and ... More in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) Merck (NYSE:MRK) stock has experienced a significant 22% decline this year, sharply underperforming the broader S&P 500 index, which is down only 1%. This downturn can be attributed to several factors: a lowered guidance for 2025 and growing concerns about the long-term growth prospects of its blockbuster drugs, Keytruda and Gardasil. Specifically, weak sales of Gardasil in China, a critical market for the vaccine, have unsettled investors. Furthermore, Keytruda is nearing the end of its market exclusivity period in 2028, raising questions about future revenue. Despite these near-term concerns, we believe the negatives might already be priced into Merck's stock. While challenges exist, the company's current valuation appears very low. We've reached this conclusion by analyzing Merck's current valuation against its recent operating performance and its historical and current financial health. Our assessment of Merck across key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—indicates that the company possesses strong operating performance and financial condition. However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Going by what you pay per dollar of sales or profit, MRK stock looks cheap compared to the broader market. Merck's Revenues have grown marginally over recent years. Merck's profit margins are much higher than most companies in the Trefis coverage universe. Merck's balance sheet looks fine. MRK stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on MRK stock? Our dashboard How Low Can Merck Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes. In summary, Merck's performance across the parameters detailed above are as follows: • Growth: Neutral • Profitability: Very Strong • Financial Stability: Neutral • Downturn Resilience: Strong • Overall: Strong Considering Merck's very low valuation and its strong performance across key financial and operational parameters, we believe MRK stock is an attractive buy. However, it's crucial for investors to acknowledge the inherent risks. As seen during the 2008 financial crisis, MRK stock plummeted over 65% from its peak, demonstrating its susceptibility to significant downturns. Current concerns also include the potential for continued declines in Gardasil sales and a slowdown in Keytruda's sales growth as it approaches patent expiry. Should these scenarios materialize, MRK stock could experience further declines. While we view Merck's current valuation as compelling, investors should thoroughly weigh these risks against the potential upside. While MRK stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Forbes
17-04-2025
- Business
- Forbes
Microsoft Stock At $370: Opportunity Or Trap?
WEST BENGAL, INDIA - 2024/12/11: In this photo illustration, a Microsoft Azure logo is seen ... More displayed on a smartphone with a Microsoft logo in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) The current period presents concerns for broader markets, which inevitably create challenges for Microsoft (NASDAQ:MSFT). Growing economic anxieties in the United States, fueled by the implementation of tariffs and an escalating trade war, are fostering a generally unfavorable market climate. While Microsoft's stock has not been immune, declining from nearly $450 in January to around $370, its drop has been less severe than some other tech stocks. This relative resilience can be attributed to Microsoft's limited exposure to China (reportedly low-single-digits contribution to sales) and its focus on the software and cloud side of its business, offering some insulation from global trade tensions. Separately see – ASML Stock To $400? The question now is whether to buy MSFT stock at $370. We think so. Our positive outlook is based on a comprehensive analysis comparing Microsoft's current valuation against its recent operating performance, as well as its present and historical financial standing. This assessment, which considers key parameters such as Growth, Profitability, Financial Stability, and Downturn Resilience, reveals that Microsoft possesses a very strong operating performance and a robust financial condition, as will be detailed further. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Going by what you pay per dollar of sales or profit, MSFT stock looks expensive compared to the broader market. Microsoft's Revenues have seen notable growth over recent years. Microsoft's profit margins are considerably higher than most companies in the Trefis coverage universe. Microsoft's balance sheet looks very strong. MSFT stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on MSFT stock? Our dashboard How Low Can Microsoft Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes. In summary, Microsoft's performance across the parameters detailed above are as follows: Given Microsoft's very strong performance across key parameters, the stock presents an attractive investment opportunity. While its valuation may appear high when compared to the broader market, Microsoft's current trailing price-to-earnings (P/E) ratio of 30x is actually lower than its three-year average of 33x. Coupled with the continued robust growth expected from its cloud offerings, Microsoft appears to be a compelling buying opportunity for long-term investors at the current levels. Although near-term volatility related to ongoing tariffs does pose a risk, for investors with a time horizon of 3 to 5 years, we believe MSFT is a sound stock to buy. Not too happy about the volatile nature of MSFT stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
