Value
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 1.4 |
| P/S | 8.5 |
| EV/EBITDA | 0.0 |
| Analyst target | 9.0 |
PHAR · Why this verdict
Why Pharming Group (PHAR) 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 score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a market cap of $0.91 billion, Pharming falls below the $1 billion minimum investable threshold, placing it outside the standard investable universe regardless of other metrics. Warnings | Market cap rises above $1.0 billion within 12 months as the share price recovers toward analyst targets. | →Stable |
| CounterSub-$1 billion biotechs can remain below the threshold indefinitely if revenue growth does not materialize or sentiment does not improve. | ||
Revenue is declining at -8% annually and the momentum score is 3.7 out of 10, below the minimum gate of 4.5, with the OBV showing volume distribution and the stock trading below its 200-day moving average. Momentum breakdown | Revenue returns to positive growth above 5% year-over-year and momentum score rises above 5.0 within 12 months. | →Stable |
| CounterThe 200-day moving average is still rising at +1.5% per month, suggesting the current price weakness may be a pullback within a broader uptrend rather than a structural downtrend. | ||
A Piotroski F-Score of 8 out of 9 and free cash flow conversion at 478% of net income are exceptional, indicating the company generates substantially more cash than its reported net income suggests. Quality breakdown | Piotroski score remains above 7 and free cash flow conversion stays above 200% of net income for 4 consecutive quarters. | →Stable |
| CounterHigh Piotroski scores in small biotechs can reflect accounting timing rather than durable cash generation, and the Rule of 40 score of 8 falls below the passing threshold. | ||
Analysts project a 168% price increase from current levels with a forward P/E of 44.1x and PEG ratio of 0.84, suggesting the market has not priced in expected earnings growth. Sentiment breakdown | Stock price rises above $20 within 12 months as earnings growth drives re-rating toward analyst targets. | →Stable |
| CounterLight analyst coverage of only 4 analysts dampens signal reliability, and the average earnings surprise history includes outliers that distort the consensus picture. | ||
At a market cap of $0.91 billion, Pharming falls below the $1 billion minimum investable threshold, placing it outside the standard investable universe regardless of other metrics.
→StableWarnings
- Expectation
- Market cap rises above $1.0 billion within 12 months as the share price recovers toward analyst targets.
CounterSub-$1 billion biotechs can remain below the threshold indefinitely if revenue growth does not materialize or sentiment does not improve.
Revenue is declining at -8% annually and the momentum score is 3.7 out of 10, below the minimum gate of 4.5, with the OBV showing volume distribution and the stock trading below its 200-day moving average.
→StableMomentum breakdown
- Expectation
- Revenue returns to positive growth above 5% year-over-year and momentum score rises above 5.0 within 12 months.
CounterThe 200-day moving average is still rising at +1.5% per month, suggesting the current price weakness may be a pullback within a broader uptrend rather than a structural downtrend.
A Piotroski F-Score of 8 out of 9 and free cash flow conversion at 478% of net income are exceptional, indicating the company generates substantially more cash than its reported net income suggests.
→StableQuality breakdown
- Expectation
- Piotroski score remains above 7 and free cash flow conversion stays above 200% of net income for 4 consecutive quarters.
CounterHigh Piotroski scores in small biotechs can reflect accounting timing rather than durable cash generation, and the Rule of 40 score of 8 falls below the passing threshold.
Analysts project a 168% price increase from current levels with a forward P/E of 44.1x and PEG ratio of 0.84, suggesting the market has not priced in expected earnings growth.
→StableSentiment breakdown
- Expectation
- Stock price rises above $20 within 12 months as earnings growth drives re-rating toward analyst targets.
CounterLight analyst coverage of only 4 analysts dampens signal reliability, and the average earnings surprise history includes outliers that distort the consensus picture.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Pharming Group is a small-cap biotech below the minimum investable market cap of $1 billion, with declining revenue of -8% but an exceptional Piotroski score of 8 out of 9, strong free cash flow conversion, and analyst targets implying 128% upside if momentum recovers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 3.3 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 1.7 |
| Current ratio | 8.9 |
| FCF quality | 10.0 |
| Moat | 5.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 478% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 8 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
0.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.4 |
- ▸Declining revenue: -8%
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 1.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 149%
Insider
5.0/10data confidence 50%Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.2 |
| quality rank | 6.7 |
| growth rank | 3.1 |
- ▸Superior ROE vs peers
Technical
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.5 |
| support resistance | 1.0 |
| 52w position | 2.9 |
| gap | 5.0 |
Risk (lower is worse)
8.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 10.0 |
| volatility | 5.0 |
| beta | 10.0 |
| debt equity | 8.3 |
Catalyst
5.0/10data confidence 75%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (8)
- MOMENTUM:6.3>=5.5
- ASYMMETRY:8.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=6.3>=5.0 recovering
Reward-to-Risk
8.52
Upside
+112.0%
Downside
13.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 68
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 8.7) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 8.52 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 8.7, Sentiment at 7.5, and Value at 6.7; the weakest are Growth at 0.4, Technical at 2.4, and Peer rank at 3.7. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 8.52 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Below Investable Market Cap
Trip ifMarket cap falls below $0.70 billion, indicating further deterioration in investability and increasing liquidity risk.
- P2Revenue Decline Momentum Weakness
Trip ifRevenue declines more than 15% year-over-year for 2 consecutive quarters, indicating accelerating business contraction.
- P3High Piotroski Cashflow Quality
Trip ifPiotroski F-Score drops below 6 or free cash flow falls below 50% of net income for 2 consecutive quarters.
- P4Analyst Upside Valuation
Trip ifAnalyst consensus price target falls below $18.00, reducing implied upside to less than 40% from current levels.