REGN Stock Undervalued At $500?

Core Viewpoint - Regeneron Pharmaceuticals' stock has experienced a significant decline due to the failure of its COPD treatment, itepekimab, in a late-stage clinical trial, which was expected to be a blockbuster drug with peak sales projections between $2 billion and $6 billion [1][14]. Stock Performance - Regeneron shares fell 19% on May 30, trading at $490, which is a 60% decrease from its 52-week peak of approximately $1,200 [2]. - The stock has seen a notable drop of 25.8% from a peak of $738.84 on April 8, 2022, to $548.35 on June 14, 2022, compared to a 25.4% decline for the S&P 500 [13]. Financial Metrics - Regeneron has a price-to-sales (P/S) ratio of 4.6, a price-to-free cash flow (P/FCF) ratio of 16.4, and a price-to-earnings (P/E) ratio of 14.4, compared to 3.0, 20.5, and 26.4 for the S&P 500, respectively [8]. - The company's revenues have grown 7.5% from $13 billion to $14 billion in the past 12 months, while the S&P 500 saw a 5.5% growth [8]. - Regeneron's operating income over the last four quarters was $3.8 billion, with an operating margin of 27.2%, significantly higher than the S&P 500's 13.2% [12]. Profitability and Stability - Regeneron has demonstrated very strong profitability, with a net income margin of 31.9% compared to 11.6% for the S&P 500 [12]. - The company's balance sheet is robust, with a debt total of $2.7 billion and a market capitalization of $52 billion, resulting in a low debt-to-equity ratio of 4.2% [12]. Future Growth Potential - Despite the setback with itepekimab, Regeneron is expected to benefit from the strong growth of Dupixent, which saw sales rise 19% to $3.7 billion last quarter, with potential peak annual sales exceeding $20 billion [14]. - The company has a promising pipeline with over a dozen programs in late-stage trials, indicating future growth opportunities [14].