Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.4 |
| P/S | 0.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.0 |
| PEG | 9.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 25.2x
- ▸PEG: 0.53
LGND · Why this verdict
Why Ligand Pharmaceuticals Incorpor (LGND) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ligand is a high-quality pharmaceutical royalty franchise with a wide economic moat, elite margins, and a strong multi-quarter earnings track record, but the stock has reached its analyst price target leaving just 0.2% of upside at current levels — and a high-severity single-supplier dependency creates a meaningful concentration risk that warrants patience before adding exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business carries a wide economic moat, sustains gross margins of 56%, and scores 66 on the Rule of 40 — a level the data characterizes as elite — signaling the company can generate high returns and grow simultaneously across multiple market cycles. Quality breakdown | Gross margin holds above 50% and the Rule-of-40 metric remains above 55 for four consecutive quarters, confirming structural franchise strength. | →Stable |
| CounterThe most recent quarter delivered an EPS miss of roughly 10%, showing even a wide-moat franchise can face execution disruptions; if that miss reflects something systematic rather than one-off, the quality narrative may need to be reassessed. | ||
The stock is trading within 0.2% of its take-profit target, effectively at the analyst price objective — meaning there is no remaining reward at the current price level, and the setup has been downgraded from a buy-wait posture for this reason. Warnings | A price pullback of at least 8% from current levels creates enough room between the stock price and the target to justify fresh evaluation. | →Stable |
| CounterMomentum is strong — MACD is bullish, on-balance volume is accumulating, and the stock is above its 200-day moving average — so the price may push through the current target if analyst consensus is revised upward. | ||
The company carries a high-severity single-supplier concentration for critical manufacturing inputs, meaning any disruption to that sole-source partner would be difficult to replace quickly and could materially impair revenue delivery. Risk breakdown | The company discloses at least one additional qualified manufacturing partner for sole-sourced inputs in an SEC filing within twelve months, reducing single-source dependency. | →Stable |
| CounterA deliberate sole-source manufacturing arrangement can enable tighter quality control and cost discipline; the concentration may represent a strategic choice rather than a vulnerability if the partner relationship is contractually protected. | ||
Three of the four most recent quarters produced large EPS beats averaging 36% in positive surprise, but the most recent quarter missed by roughly 10% — introducing uncertainty about whether the beat streak will resume. Earnings | EPS beats resume in each of the next two reported quarters with a positive surprise above 5%, reestablishing the historical cadence. | →Stable |
| CounterThe three prior beats were exceptionally large, and a single 10% miss after three outsized quarters is consistent with a one-time item rather than a change in underlying earnings power — the baseline for a sustained beat streak may still be intact. | ||
The business carries a wide economic moat, sustains gross margins of 56%, and scores 66 on the Rule of 40 — a level the data characterizes as elite — signaling the company can generate high returns and grow simultaneously across multiple market cycles.
→StableQuality breakdown
- Expectation
- Gross margin holds above 50% and the Rule-of-40 metric remains above 55 for four consecutive quarters, confirming structural franchise strength.
CounterThe most recent quarter delivered an EPS miss of roughly 10%, showing even a wide-moat franchise can face execution disruptions; if that miss reflects something systematic rather than one-off, the quality narrative may need to be reassessed.
The stock is trading within 0.2% of its take-profit target, effectively at the analyst price objective — meaning there is no remaining reward at the current price level, and the setup has been downgraded from a buy-wait posture for this reason.
→StableWarnings
- Expectation
- A price pullback of at least 8% from current levels creates enough room between the stock price and the target to justify fresh evaluation.
CounterMomentum is strong — MACD is bullish, on-balance volume is accumulating, and the stock is above its 200-day moving average — so the price may push through the current target if analyst consensus is revised upward.
The company carries a high-severity single-supplier concentration for critical manufacturing inputs, meaning any disruption to that sole-source partner would be difficult to replace quickly and could materially impair revenue delivery.
→StableRisk breakdown
- Expectation
- The company discloses at least one additional qualified manufacturing partner for sole-sourced inputs in an SEC filing within twelve months, reducing single-source dependency.
CounterA deliberate sole-source manufacturing arrangement can enable tighter quality control and cost discipline; the concentration may represent a strategic choice rather than a vulnerability if the partner relationship is contractually protected.
Three of the four most recent quarters produced large EPS beats averaging 36% in positive surprise, but the most recent quarter missed by roughly 10% — introducing uncertainty about whether the beat streak will resume.
→StableEarnings
- Expectation
- EPS beats resume in each of the next two reported quarters with a positive surprise above 5%, reestablishing the historical cadence.
CounterThe three prior beats were exceptionally large, and a single 10% miss after three outsized quarters is consistent with a one-time item rather than a change in underlying earnings power — the baseline for a sustained beat streak may still be intact.
Per-dimension breakdown
Quality
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.7 |
| ROA | 3.5 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 6.6 |
| Moat | 7.6 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 56%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Rule of 40: 66 (elite)
Growth
8.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.0 |
| EPS growth | 10.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.1 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 8.0 |
| Price target | 4.1 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $8,008,709 (0.140% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 9.0 |
| growth rank | 4.5 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 2.8 |
| volatility | 2.5 |
| put call | 10.0 |
| implied vol | 5.0 |
| max pain risk | 3.0 |
| beta | 6.8 |
| debt equity | 8.2 |
| news risk | 5.5 |
- ▸Above max pain $140
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $296.57 has reached target $291.90. No upside to wait for.
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|SANITY:WAIT+price>=TPPassed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (1)
- 8K_FLAG:1.02
Reward-to-Risk
-1.21
Upside
-18.2%
Downside
15.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The C-path quality+growth combination triggered the HOLD_IF_HOLDING verdict: quality 7.7 and growth 8.0 both clear their thresholds, with asymmetric R:R of -1.21 supporting the read.
The strongest dimensions are Growth at 8.0, Quality at 7.7, and Momentum at 6.6; the weakest are Insider at 3.4, Technical at 3.8, and Value at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.21 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business carries a wide economic moat, sustains gross margins of 56%, and scores 66 on the Rule of 40 — a level the data characterizes as elite — signaling the company can generate high returns and grow simultaneously across multiple market cycles.
Trip ifGross margin compresses below 45% for 2 consecutive quarters.
- P2The stock is trading within 0.2% of its take-profit target, effectively at the analyst price objective — meaning there is no remaining reward at the current price level, and the setup has been downgraded from a buy-wait posture for this reason.
Trip ifStock price declines more than 8% from current levels ($253.25), widening upside to the take-profit level beyond 8%.
- P3The company carries a high-severity single-supplier concentration for critical manufacturing inputs, meaning any disruption to that sole-source partner would be difficult to replace quickly and could materially impair revenue delivery.
Trip ifCompany discloses at least 1 additional qualified manufacturing partner for sole-sourced inputs in an SEC filing within 12 months, reducing single-source dependency.
- P4Three of the four most recent quarters produced large EPS beats averaging 36% in positive surprise, but the most recent quarter missed by roughly 10% — introducing uncertainty about whether the beat streak will resume.
Trip ifEPS surprise exceeds 5% for both of the next 2 consecutive reported quarters, reconfirming the beat pattern.