Value
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 8.0 |
| EV/EBITDA | 2.2 |
| Fwd P/E | 9.4 |
| PEG | 8.8 |
| Analyst target | 9.0 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.70
- ▸Attractively valued
BMRN · Why this verdict
Why BioMarin Pharmaceutical (BMRN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A biotech with forward earnings priced at 8.6x, a PEG below 0.7, and free cash flow converting at 171% of net income is a quality business at an undemanding multiple — yet three consecutive earnings misses and a death cross technical hard block are actively working against that thesis, leaving the risk/reward favorable in theory at 6.5-to-1 but blocked in practice.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With a forward multiple of 8.6x, a PEG ratio of 0.68, and free cash flow converting at 171% of net income, the business offers above-average cash generation quality at an undemanding valuation — a combination reinforced by a Piotroski F-Score of 8 out of 9. Quality breakdown | Free cash flow conversion remains above 100% of net income and forward earnings estimates are maintained or raised over the next 12 months. | →Stable |
| CounterThree consecutive earnings misses suggest current valuation may reflect lower sustainable earnings power than the forward multiple implies; analysts have systematically set expectations above actual results, which could mean the stated multiple is deceptively cheap. | ||
Three consecutive quarters have come in below consensus, most recently 17% short of estimates and at one point 64% below — a persistent gap between expectations and delivery that represents the single largest near-term obstacle to the valuation thesis. Earnings | Earnings surprise turns positive and exceeds 0% for 2 consecutive quarters, breaking the miss streak and demonstrating improved execution against expectations. | →Stable |
| CounterThe oldest available quarter produced a 39% beat above estimates, demonstrating that the business is capable of meaningful earnings power; the recent miss pattern may reflect a temporary reset in analyst estimates rather than structural deterioration. | ||
A death cross is in effect with the stock below its 200-day moving average, creating a hard technical block; while the MACD is improving and RSI sits at 58, on-balance volume is distributing rather than accumulating, and the structural technical signal has not yet cleared. Engine gate (failed) | Price reclaims the 200-day moving average and holds above it for 30 consecutive days, with on-balance volume turning positive. | →Stable |
| CounterThe 200-day moving average slope is declining at only 1.1% over 30 days — much flatter than a deep downtrend — and an RSI at 58 with improving MACD suggests the death cross could clear with moderate buying pressure. | ||
Three high-severity and two medium-severity concentration risks flagged in the 10-K — including dependence on a single primary customer and sole-source raw material suppliers — mean any disruption to those relationships could have outsized impact on results. Risk breakdown | The single largest customer's revenue contribution falls below 20% of total annual revenue as disclosed in the next annual report. | →Stable |
| CounterSole-source supplier relationships in specialty biotech often reflect the inherent difficulty of qualifying alternative manufacturers rather than a management failure; these risks may be structural to the category and unlikely to materialize on a near-term horizon. | ||
With 42% potential gain to the analyst price target and a 6.5-to-1 risk/reward ratio, there is material embedded optionality in this name — contingent on the earnings and technical blocks described above clearing within the holding period. Price targets | Price advances more than 20% from current levels within 12 months as the miss streak breaks and the technical death cross resolves. | →Stable |
| CounterIf earnings misses continue and analyst targets are revised lower, the apparent asymmetry could collapse quickly — three consecutive misses already suggest the path to target realization is uncertain. | ||
With a forward multiple of 8.6x, a PEG ratio of 0.68, and free cash flow converting at 171% of net income, the business offers above-average cash generation quality at an undemanding valuation — a combination reinforced by a Piotroski F-Score of 8 out of 9.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 100% of net income and forward earnings estimates are maintained or raised over the next 12 months.
CounterThree consecutive earnings misses suggest current valuation may reflect lower sustainable earnings power than the forward multiple implies; analysts have systematically set expectations above actual results, which could mean the stated multiple is deceptively cheap.
Three consecutive quarters have come in below consensus, most recently 17% short of estimates and at one point 64% below — a persistent gap between expectations and delivery that represents the single largest near-term obstacle to the valuation thesis.
→StableEarnings
- Expectation
- Earnings surprise turns positive and exceeds 0% for 2 consecutive quarters, breaking the miss streak and demonstrating improved execution against expectations.
CounterThe oldest available quarter produced a 39% beat above estimates, demonstrating that the business is capable of meaningful earnings power; the recent miss pattern may reflect a temporary reset in analyst estimates rather than structural deterioration.
A death cross is in effect with the stock below its 200-day moving average, creating a hard technical block; while the MACD is improving and RSI sits at 58, on-balance volume is distributing rather than accumulating, and the structural technical signal has not yet cleared.
→StableEngine gate (failed)
- Expectation
- Price reclaims the 200-day moving average and holds above it for 30 consecutive days, with on-balance volume turning positive.
CounterThe 200-day moving average slope is declining at only 1.1% over 30 days — much flatter than a deep downtrend — and an RSI at 58 with improving MACD suggests the death cross could clear with moderate buying pressure.
Three high-severity and two medium-severity concentration risks flagged in the 10-K — including dependence on a single primary customer and sole-source raw material suppliers — mean any disruption to those relationships could have outsized impact on results.
→StableRisk breakdown
- Expectation
- The single largest customer's revenue contribution falls below 20% of total annual revenue as disclosed in the next annual report.
CounterSole-source supplier relationships in specialty biotech often reflect the inherent difficulty of qualifying alternative manufacturers rather than a management failure; these risks may be structural to the category and unlikely to materialize on a near-term horizon.
With 42% potential gain to the analyst price target and a 6.5-to-1 risk/reward ratio, there is material embedded optionality in this name — contingent on the earnings and technical blocks described above clearing within the holding period.
→StablePrice targets
- Expectation
- Price advances more than 20% from current levels within 12 months as the miss streak breaks and the technical death cross resolves.
CounterIf earnings misses continue and analyst targets are revised lower, the apparent asymmetry could collapse quickly — three consecutive misses already suggest the path to target realization is uncertain.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.5 |
| ROA | 3.0 |
| Gross margin | 6.2 |
| Op margin | 7.2 |
| Net margin | 4.1 |
| Current ratio | 7.2 |
| FCF quality | 10.0 |
| Moat | 6.8 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 171% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
1.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 0.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 9.6 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 9.6 |
| erm sentiment | 4.9 |
- ▸Analyst upside: 52%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $176,682 (0.002% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 6.7 |
| growth rank | 3.3 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.5 |
| support resistance | 0.8 |
| 52w position | 7.4 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 5.8 |
| volatility | 6.4 |
| put call | 0.0 |
| implied vol | 6.4 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 9.1 |
- ▸Elevated put/call: 2.06
- ▸Concentration risks: 3 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.6>=5.5
- ASYMMETRY:3.8>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.84
Upside
+36.9%
Downside
9.6%
Sizing output
AVOID
SetupMOMENTUM_CONT — Trend continuation, RSI 57, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.5) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 3.84 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.5, Value at 7.2, and Momentum at 6.6; the weakest are Growth at 1.6, Catalyst at 2.5, and Technical at 3.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 3.84 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1With a forward multiple of 8.6x, a PEG ratio of 0.68, and free cash flow converting at 171% of net income, the business offers above-average cash generation quality at an undemanding valuation — a combination reinforced by a Piotroski F-Score of 8 out of 9.
Trip ifFree cash flow falls below 80% of net income for 2 consecutive quarters.
- P2Three consecutive quarters have come in below consensus, most recently 17% short of estimates and at one point 64% below — a persistent gap between expectations and delivery that represents the single largest near-term obstacle to the valuation thesis.
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P3A death cross is in effect with the stock below its 200-day moving average, creating a hard technical block; while the MACD is improving and RSI sits at 58, on-balance volume is distributing rather than accumulating, and the structural technical signal has not yet cleared.
Trip ifPrice closes above the 200-day moving average and holds for 30 consecutive trading days.
- P4Three high-severity and two medium-severity concentration risks flagged in the 10-K — including dependence on a single primary customer and sole-source raw material suppliers — mean any disruption to those relationships could have outsized impact on results.
Trip ifSingle largest customer revenue falls below 20% of total annual revenue.
- P5With 42% potential gain to the analyst price target and a 6.5-to-1 risk/reward ratio, there is material embedded optionality in this name — contingent on the earnings and technical blocks described above clearing within the holding period.
Trip ifAnalyst consensus price target falls below $65.00, reducing potential upside to less than 17% from current levels.