In a relatively weak market environment, the stock of the Hamburg-based biotech group Evotec (WKN: 566480) stands out. The reason for this may be an ad hoc announcement, according to which the company intends to further expand its partnership with the U.S. biotech company Celmatix in the field of women’s health.
In concrete terms, the deepening of the partnership means that Evotec will participate in the current financing round of Celmatix – alongside other investors such as the Life Sciences Innovation Fund and the Topspin Fund. Unfortunately, neither Evotec nor Celmatix announced how much money Evotec would invest in Celmatix and how much it would subsequently receive. In this respect, the transaction cannot really be evaluated at the moment.
Stay up to date on the latest biotech advances with Born2Invest. Our companion app includes news updates of business headlines from finance and investing to cannabis, banking, fintech, and more.
Investors took the news positively. This is probably due to the fact that, in the official Evotec announcement, Dr. Piraye Yurttas Beim said that “Celmatix is based on the idea of making the best possible use of big data and genomics to provide women with information about their reproductive health at an early stage so that they can make better decisions.” Big data is currently still a buzzword that investors are only too jump on board with.
A look at the Evotec stock leads very quickly to the conclusion that Evotec is a great company, but its stock is already very highly valued, perhaps even overvalued. Even on the basis of the recently raised business forecasts, the stock has a KUV 2019e of almost 6.8 and a KGV 2019e of around 68.
On the other hand, however, there is “only” sales growth of around 15% and profit growth of a good 10%. If the stock was therefore valued according to “normal standards”, the fundamentally fair value would actually only be about half of the current value. However, an investor in biotech companies also has to consider the drug pipeline and its medium to long-term potential.
Nevertheless, the stock is still not a bargain, even at the current somewhat reduced price level. In addition, despite numerous positive reports recently, the stock continues to appear weak on the chart. At least a second test of the important chart technical support around $19.94 (€18) seems possible. If this support should hold, the chart picture brightens again immediately. However, if it falls, a chart technical sell signal with a price target of $16.06 (€14.50) is generated here. Hold with stop price just under $19.94 (€18).
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in sharedeals.de, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Innovation in Healthcare Technology, Key to the Sustainability of the Healthcare System
Lluís Blanch identified two barriers to innovation in healthcare technology: the lack of interoperability of data and the lack of...
Equity Crowdfunding as a Tool to Allow SMEs to Make Open Innovation
The term "Open Innovation" is used more and more frequently, especially in reference to large companies which, in order to...
Stock Markets Seem to Be on the Verge of a Nervous Breakdown
The stock markets keep going up. This rebound after a 5% or so correction is swift so it may not...
Where To Delegate Your 2022 Marketing Budget
Business goals start with marketing. And marketing starts with a plan. Start planning early, and you set yourself up ahead...
Mexican Senators Say Cannabis Legalization Would Generate Employment and Will Put a Strain on Drug Trafficking
Mexico could be a leader in the production, and commercialization of cannabis, if the country would legalize it. Senators present...
Biotech2 weeks ago
Canada’s Hidden Health Crisis: Is This Company the Only One Paying Attention?
Cannabis2 weeks ago
The First Bottles of Medical Cannabis Oil Delivered to Patients in Jujuy, Argentina
Featured2 weeks ago
A Look at Gold on an Inflation-Adjusted Basis
Featured2 weeks ago
Banking-as-a-Service: the Fintech Company Swan Raises €16 Million from Accel