Value
5.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 1.1 |
| P/S | 8.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.0 |
| PEG | 10.0 |
- ▸Forward P/E: 35.7x
- ▸PEG: 0.30
PHAR · Why this verdict
Why Pharming Group (PHAR) 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 score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
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.
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. | ↑Improving |
| 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. | Tripped↑Improving |
| 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.
↑ImprovingMomentum 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.
Tripped↑ImprovingSentiment 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.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.2 |
| ROA | 2.3 |
| Gross margin | 10.0 |
| Op margin | 0.6 |
| Net margin | 1.3 |
| Current ratio | 10.0 |
| FCF quality | 10.0 |
| Moat | 5.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 405% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 7 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.7 |
| EPS growth | 10.0 |
- ▸Declining revenue: -3%
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 2.2 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 10.0 |
| vol acceleration | 10.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.8%/30d — confirmed downtrend
- ▸Volume surge (4.9x avg) on up move
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: 203%
Insider
5.0/10data confidence 50%Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 6.7 |
| growth rank | 3.6 |
- ▸Superior ROE vs peers
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.4 |
| support resistance | 5.8 |
| 52w position | 0.6 |
| gap | 6.0 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 9.4 |
| volatility | 0.0 |
| 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
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 35, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -47% (>40% off 52w high), Binary industry: Biotechnology
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.1>=5.5. Top dim: Sentiment at 7.5; weakest: Peer rank at 4.6. No conviction either direction.
The strongest dimensions are Sentiment at 7.5, Risk (lower is worse) at 7.5, and Momentum at 6.1; the weakest are Peer rank at 4.6, Technical at 4.7, and Catalyst at 5.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 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 ValuationTripped
Trip ifAnalyst consensus price target falls below $18.00, reducing implied upside to less than 40% from current levels.