Valuation Scorecard: Stock Rating D-Negative (2/27/24)-Repligen Corp (RGEN).

As reflected at the current price of $194, what future Repligen operating performance is the market anticipating? To achieve average annual stock market performance of 9.0% over the next 6 years, Repligen shares will need to reach $326. Upper quartile performance will require a $383 Repligen stock price by 2028.

Executive Summary

• Key Repligen characteristics: high expected growth, high financial strength, high stability, and high profitability. A big positive influence on Repligen’s valuation is its superior Growth.
• Very high valuation, below market shareholder returns. Current valuation levels are very high relative to the Repligen Peer Group. Recent market returns have underperformed the Repligen Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, Repligen shares should reach a level of $137 by 2028 — an -5.6% per year total shareholder return. A 2028 stock price of $326 would reflect median performance and a price of $383 would be required to reach upper quartile performance.
• Growth has been Repligen’s biggest valuation strength. Historical growth has been very high relative to the Repligen Peer Group and forecasted growth is relatively very high. Equity Growth, Revenue Growth, and Asset Growth have been superior. These factors have buoyed market perceptions of Repligen. Repligen’s historical income statement growth has been higher than growth in the balance sheet. Revenue growth has exceeded asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity. Repligen’s consensus growth expectations are lower than historical growth.
• Pretax Margin, and Pretax ROA are group leading. Asset Turnover is group lagging. The company has high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
• Repligen’s risk profile is very favorable. Overall variability has been very high with very high revenue variability, very low E.P.S. variability, and relatively low stock price volatility. Financial Strength is relatively very high and earnings’ expectations are very low. The debt/capital ratio has been relatively steady.

Click to read the full Scorecard report