Vir Biotechnology (VIR) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Vir Biotechnology (VIR) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Vir Biotechnology Fundamentals
Stock Price Target: $43.11
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Vir Biotechnology in comparison to the Biotechnology industry and the S&P 500.
Vir Biotechnology is a Small Cap company with a Market Cap of $3.05B.
How are investors using Vir Biotechnology earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Vir Biotechnology is 36.10%, in comparison to 4.87% for the S&P 500 and 3.33% for the 10-year treasury bond. The median earnings yield for the Biotechnology industry is 8.85%.
What does Vir Biotechnology Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Vir Biotechnology is currently trading at a P/E of 2.77. The P/E for the Biotechnology industry is 96.82 and the P/E for the S&P 500 is 20.55.
What is the current Price-to-Sales Ratio (P/S) for Vir Biotechnology?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Vir Biotechnology is currently trading at a P/S of 2.71. The P/S for the Biotechnology industry is 6.67 and the P/S for the S&P 500 is 2.52.
How does Vir Biotechnology Price-to-BookRatio (P/B) compare to the Biotechnology industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Vir Biotechnology P/B ratio is 2.03. The P/B for the Biotechnology industry is 5.99 and the P/B for the S&P 500 is 4.04.
How attractive is Vir Biotechnology Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Vir Biotechnology ROIC is currently 74.63% in comparison to 0.34% for the Biotechnology industry and 10.10% for the S&P 500.
How has VIR stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Vir Biotechnology has traded between the range of $18.21 and $58.
The current Analyst Price Target for Vir Biotechnology is $43.11.
What is Vir Biotechnology YOY Performance in comparison to its industry and the total market?
The YOY performance for Vir Biotechnology is -54.80%. The Biotechnology industry has a YOY performance of -3.33% in comparison to the YOY S&P 500 performance of -10.10%.
Recent Financial Results
- Total revenues for the quarter ended June 30, 2022, were ($40.6M), compared to $177.1M for the same period in 2021.
- R&D expenses for the quarter ended June 30, 2022, were $115.1M, which included $14.1M of non-cash stock-based compensation expense, compared to $86.1M for the same period in 2021, which included $10.9M of non-cash stock-based compensation expense.
- Net loss for the quarter ended June 30, 2022, was ($76.5M), compared to net income of $61.8M for the same period in 2021.
- As of June 30, 2022 the Company had more than $2.6B in cash, cash equivalents, investments and profit-share payments to be received from GSK.
Stock Price Target: $43.11
Vir Biotechnology, Inc., a commercial-stage immunology company, develops therapeutic products to treat and prevent serious infectious diseases. It develops Sotrovimab (VIR-7832), a SARS-CoV-2-neutralizing mAbs to treat and prevent COVID-19 infection under the Xevudy brand; VIR-2218 and VIR-3434 for the treatment of hepatitis B virus; VIR-2482 for the prevention of influenza A virus; and VIR-1111 for the prevention of human immunodeficiency virus. The company has grant agreements with Bill & Melinda Gates Foundation and National Institutes of Health.
It also has a manufacturing agreement with Samsung Biologics Co.,Ltd. for the manufacture of SARS-COV-2 antibodies; and clinical collaboration with Gilead Sciences, Inc. for chronic hepatitis B virus. Vir Biotechnology, Inc. was incorporated in 2016 and is headquartered in San Francisco, California.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.