3 Biotech Stocks to Buy on the Dip: July 2024

Industry Overview - The biotechnology sector remains relevant due to the ongoing human desire to find solutions for diseases and conditions, despite its unpredictability and associated risks [1][2] - The global biotech market was valued at $1.55 trillion last year and is projected to grow at a compound annual growth rate of 13.96% from 2024 to 2030, potentially reaching $3.88 trillion [10] Company Analysis: Jazz Pharmaceuticals (JAZZ) - Jazz Pharmaceuticals has an average earnings per share (EPS) of $4.26 over the past four quarters, falling short of the anticipated $4.68, resulting in a negative earnings surprise of 9.75% [3] - Analysts project EPS could reach $20.72 on sales of $4.35 billion by fiscal 2025, compared to last year's EPS of $18.29 on revenue of $3.83 billion [4] - Current valuation metrics show JAZZ stock trading at 5.56X forward earnings and 1.97X trailing-year sales, down from 6.94X and 2.3X respectively from Q1 2023 to Q1 2024 [13] Company Analysis: Takeda Pharmaceutical (TAK) - Takeda Pharmaceutical's stock has underperformed, losing about 5% year-to-date and approximately 12% over the past 52 weeks, with a five-year return showing a 19% loss [5] - Analysts expect sales to rise 8.7% to $28.85 billion by the end of the year, indicating potential for recovery [6] - The current revenue multiple for TAK stock is 1.58X, slightly down from 1.68X the previous year, suggesting room for valuation improvement [16] Company Analysis: Pacira BioSciences (PCRX) - Pacira BioSciences has an average EPS of 75 cents over the past four quarters, narrowly missing the consensus estimate of 76 cents, leading to a negative earnings surprise of 1% [7] - Analysts forecast EPS could reach $3.64 on revenue of $760.61 million by fiscal 2025, up from last year's EPS of $2.81 on sales of $674.98 million [8] - The current valuation shows PCRX stock trading at a forward earnings multiple of 7.47X and a sales multiple of 1.57X, down from 10.03X and 2.47X respectively over the prior year [19]