Value
7.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 8.0 |
| EV/EBITDA | 0.8 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 10.4x
- ▸PEG: 0.01
- ▸Attractively valued
SUPN · Why this verdict
Why Supernus Pharmaceuticals (SUPN) 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 score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Supernus Pharmaceuticals is growing revenue at 39% year-over-year and passes the Rule of 40 at a score of 56, but 76% of revenues are concentrated in three drug distributors and the stock is in an oversold technical condition with momentum at 3.2 out of 10 and 11% short interest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Supernus is growing revenue at 39% year-over-year while passing the Rule of 40 at 56, and generating a 17% free cash flow margin despite GAAP losses, indicating that the business model is scaling efficiently with real cash generation beneath accounting losses. Quality breakdown | Revenue growth remains above 25% year-over-year over the next 12 months, confirming the current growth trajectory is sustainable rather than a one-period surge. | →Stable |
| CounterSpecialty pharmaceutical revenue growth concentrated in a limited number of products can reverse sharply if a key drug faces generic competition or formulary changes; 39% growth may be front-loaded before patent expirations. | ||
Three distributors — Cencora, Cardinal Health, and McKesson — account for 76% of revenues, creating a negotiating power imbalance where pricing decisions or supply chain disruptions at any of these three counterparties could materially reduce Supernus revenues. Bear case | Revenue from the three major distributors falls below 65% of total sales within 12 months as the company diversifies its distribution channels. | →Stable |
| CounterVirtually all US specialty pharmaceutical companies route the majority of sales through the same three distributors; this is structural to the US drug distribution system rather than a Supernus-specific risk. | ||
With RSI at 28, falling on-balance volume, and the stock below the 200-day moving average, Supernus is in a capitulation technical condition while 11% short interest adds ongoing selling pressure from bearish market participants. Momentum breakdown | RSI recovers above 40 and short interest falls below 8% within 12 months, indicating both the technical extreme and bearish positioning have resolved. | →Stable |
| CounterAn RSI of 28 is technically oversold by most definitions and historically has coincided with the most attractive entry points; the oversold condition combined with 24.6% upside to analyst targets may represent a contrarian opportunity. | ||
Supernus has a 2-beat, 2-miss pattern over the last 4 quarters with one quarter delivering a 215% beat and another quarter delivering a 25% miss, indicating extreme volatility in quarterly earnings delivery that makes financial planning and investor communication difficult. Earnings | Earnings beat rate improves to at least 3 beats in the next 4 quarters, with the average surprise turning consistently positive above 10%. | →Stable |
| CounterThe large beats and large misses may reflect timing differences in pharmaceutical revenue recognition rather than operational inconsistency; the 64.9% average surprise despite the mixed record suggests the business is generally performing above estimates. | ||
Supernus is growing revenue at 39% year-over-year while passing the Rule of 40 at 56, and generating a 17% free cash flow margin despite GAAP losses, indicating that the business model is scaling efficiently with real cash generation beneath accounting losses.
→StableQuality breakdown
- Expectation
- Revenue growth remains above 25% year-over-year over the next 12 months, confirming the current growth trajectory is sustainable rather than a one-period surge.
CounterSpecialty pharmaceutical revenue growth concentrated in a limited number of products can reverse sharply if a key drug faces generic competition or formulary changes; 39% growth may be front-loaded before patent expirations.
Three distributors — Cencora, Cardinal Health, and McKesson — account for 76% of revenues, creating a negotiating power imbalance where pricing decisions or supply chain disruptions at any of these three counterparties could materially reduce Supernus revenues.
→StableBear case
- Expectation
- Revenue from the three major distributors falls below 65% of total sales within 12 months as the company diversifies its distribution channels.
CounterVirtually all US specialty pharmaceutical companies route the majority of sales through the same three distributors; this is structural to the US drug distribution system rather than a Supernus-specific risk.
With RSI at 28, falling on-balance volume, and the stock below the 200-day moving average, Supernus is in a capitulation technical condition while 11% short interest adds ongoing selling pressure from bearish market participants.
→StableMomentum breakdown
- Expectation
- RSI recovers above 40 and short interest falls below 8% within 12 months, indicating both the technical extreme and bearish positioning have resolved.
CounterAn RSI of 28 is technically oversold by most definitions and historically has coincided with the most attractive entry points; the oversold condition combined with 24.6% upside to analyst targets may represent a contrarian opportunity.
Supernus has a 2-beat, 2-miss pattern over the last 4 quarters with one quarter delivering a 215% beat and another quarter delivering a 25% miss, indicating extreme volatility in quarterly earnings delivery that makes financial planning and investor communication difficult.
→StableEarnings
- Expectation
- Earnings beat rate improves to at least 3 beats in the next 4 quarters, with the average surprise turning consistently positive above 10%.
CounterThe large beats and large misses may reflect timing differences in pharmaceutical revenue recognition rather than operational inconsistency; the 64.9% average surprise despite the mixed record suggests the business is generally performing above estimates.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.7 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.9 |
| FCF quality | 7.4 |
| Moat | 5.8 |
| Rule of 40 | 9.0 |
| Piotroski F | 8.9 |
- ▸FCF-positive despite GAAP loss (FCF margin 17%, FCF yield 5.1%)
- ▸Rule of 40: 56 (pass)
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 39% YoY
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 5.2 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.4%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.1 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 39%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 1.9 |
| growth rank | 8.9 |
- ▸Industry growth leader
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 4.8 |
| 52w position | 5.2 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.3 |
| days to cover | 3.1 |
| volatility | 5.2 |
| put call | 6.7 |
| implied vol | 6.1 |
| max pain risk | 3.0 |
| beta | 9.7 |
| debt equity | 1.2 |
- ▸Above max pain $41
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (8)
- MOMENTUM:5.9>=5.5
- ASYMMETRY:3.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (0)
none
Reward-to-Risk
3.43
Upside
+20.9%
Downside
6.1%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 54
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $2.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 3.43 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Value at 7.1, and Sentiment at 6.3; the weakest are Peer rank at 4.2, Technical at 4.6, and Risk (lower is worse) at 4.9. The V9 engine cleared all gates, producing an asymmetric reward-to-risk of 3.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Supernus is growing revenue at 39% year-over-year while passing the Rule of 40 at 56, and generating a 17% free cash flow margin despite GAAP losses, indicating that the business model is scaling efficiently with real cash generation beneath accounting losses.
Trip ifRevenue growth falls below 15% year-over-year, declining more than 24 percentage points from the current 39% rate.
- P2Three distributors — Cencora, Cardinal Health, and McKesson — account for 76% of revenues, creating a negotiating power imbalance where pricing decisions or supply chain disruptions at any of these three counterparties could materially reduce Supernus revenues.
Trip ifRevenue from the 3 major distributors rises above 85%, exceeding the current 76% concentration as the company loses any alternative channels.
- P3With RSI at 28, falling on-balance volume, and the stock below the 200-day moving average, Supernus is in a capitulation technical condition while 11% short interest adds ongoing selling pressure from bearish market participants.
Trip ifShort interest rises above 15%, exceeding the current 11% and indicating further deterioration in market sentiment toward the stock.
- P4Supernus has a 2-beat, 2-miss pattern over the last 4 quarters with one quarter delivering a 215% beat and another quarter delivering a 25% miss, indicating extreme volatility in quarterly earnings delivery that makes financial planning and investor communication difficult.
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, confirming the miss pattern is dominant rather than the beat pattern.