At the current price of $3, what are market expectations regarding Geron’s future operating performance? Over the next 6 years, Geron shares will need to reach $6 to achieve average annual stock market performance of 9.0%. To achieve Upper quartile performance, Geron’s stock price will need to reach $7 by 2029.
Executive Summary
- Price Target Research identifies Geron as having: high stability, average profitability, low financial strength, and very low expected growth. A big positive influence on Geron’s valuation is its superior Growth.
- Very high valuation, above market shareholder returns. Current valuation levels are very high relative to the Geron Peer Group. Recent market returns have outperformed the Geron Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, Geron shares should reach a level of $1 by 2029 — an -24.6% per year total shareholder return. A 2029 stock price of $6 would reflect median performance and a price of $7 would be required to reach upper quartile performance.
- Growth has been Geron’s biggest valuation strength. Historical growth has been high relative to the Geron Peer Group and forecasted growth is relatively very low. Asset Growth has been superior. This factor has buoyed market perceptions of Geron. Geron’s historical income statement and balance sheet growth are not available.
- Asset Turnover, and Pretax Margin are group lagging. These factors have negatively affected market perceptions of Geron. The company has very high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
- Geron’s risk profile is neutral. Overall variability has been above average with above average revenue variability, and very low stock price volatility. Financial Strength is below average and earnings’ expectations are only average. The debt/capital ratio has declined.
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