Alkermes (ALKS) AI Stock Analysis

• Market Cap: $5.77B
• Dividend Yield: N/A
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 17.1
• Beta (1Y): 0.68
• Revenue Growth: 1.08%
• EPS Growth: 3.40%
• Country: US
• Employees: 1,800
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.68
• Shares Outstanding: 165,117,510
• 10 Day Avg. Volume: 2,215,558
• 30 Day Avg. Volume: 1,763,737
• PEG Ratio: 3.47
• Price to Book (P/B): 3.25
• Price to Sales (P/S): 3.05
• P/FCF Ratio: 11.73
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 3.38
• Enterprise Value/Gross Profit: 3.93
• Enterprise Value/Ebitda: 11.81
• 1Y Price Target: $46.17
• Price Target Upside: 32.07% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $40.00 ▲(14.42% Upside)

The score is driven primarily by strong financial performance (high margins, low leverage, and strong cash conversion) and a constructive earnings update with raised guidance and solid product growth. Valuation looks reasonable on a 14.644 P/E, while technicals are mixed due to a slightly negative MACD and elevated stochastic despite price holding above key moving averages.

Positive Factors

High gross and net margins

Sustained high gross and net margins reflect strong pricing power and low incremental costs for proprietary drugs (VIVITROL, ARISTADA, LYBALVI). Durable margins support internal funding of R&D, dividend of cash to shareholders, and resilience to revenue volatility over coming months.

Strong cash generation

Very strong free cash flow growth and healthy operating cash to net income ratio indicate high earnings quality and convertibility. This durable cash generation reduces financing reliance, funds pipeline investment and M&A, and improves balance sheet flexibility over a 2-6 month horizon.

Pipeline advancement in sleep disorders

Breakthrough designation and planned global Phase III elevate alixorexton from early to de‑risked late‑stage development. If successful, this structurally expands Alkermes into a multi‑billion sleep market, diversifying revenue beyond current psychiatry portfolio and underpinning long‑term growth.

Negative Factors

Rising R&D expense

Material R&D step‑up funds multiple phase 2/3 programs but increases cash burn and compresses near‑term margins. This spending is structural until readouts arrive; failure or delays in key trials would leave higher cost base without offsetting revenue, stressing returns.

Higher SG&A from commercial expansion

Elevated SG&A from expanding the psychiatry field organization raises fixed operating costs and reduces operating leverage. If product sales growth decelerates, the larger salesforce and promotional spend could pressure profitability for several quarters until revenue catches up.

Acquisition financing and integration risk

Paying up for Avadel and arranging bridge financing introduces execution, integration and short‑term liquidity risk. While strategic, the deal raises leverage and depends on realizing projected LUMRYZ synergies; poor integration could dilute margins and strain cash over 2–6 months.

Alkermes Business Overview & Revenue Model

Company Description

Alkermes plc, a biopharmaceutical company, researches, develops, and commercializes pharmaceutical products to address unmet medical needs of patients in various therapeutic areas in the United States, Ireland, and internationally. Its marketed products include ARISTADA, an intramuscular injectable suspension for the treatment of schizophrenia; VIVITROL for the treatment of alcohol and prevention of opioid dependence; RISPERDAL CONSTA for the treatment of schizophrenia and bipolar I disorder; INVEGA SUSTENNA for the treatment of schizophrenia and schizoaffective disorder; XEPLION, INVEGA TRINZA, and TREVICTA to treat schizophrenia and schizoaffective; and VUMERITY for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting and active secondary progressive diseases. The company is also developing LYBALVI, an oral atypical antipsychotic drug candidate for the treatment of adults with schizophrenia and bipolar I disorder; and nemvaleukin alfa, an engineered fusion protein to expand tumor-killing immune cells and to avoid the activation of immunosuppressive cells. It has collaboration agreements primarily with Janssen Pharmaceutica N.V., Janssen Pharmaceutica Inc, and Janssen Pharmaceutica International. Alkermes plc was founded in 1987 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Alkermes generates revenue primarily through the sale of its proprietary pharmaceutical products, including Vivitrol and Aristada. The company also earns income from royalties on products developed through its proprietary technologies, as well as through collaborations and partnerships with other pharmaceutical companies. Significant partnerships, such as those with larger pharmaceutical firms, enhance its research and development capabilities and provide additional revenue streams. Alkermes also engages in licensing agreements that may contribute to its earnings, allowing it to leverage its drug development expertise while minimizing risk.

Alkermes Financial Statement Overview

Summary

Strong profitability (TTM gross margin 86.04%, net margin 22.27%) with positive TTM revenue growth (6.6%). Balance sheet is conservatively financed (debt-to-equity 0.041; equity ratio 74.42%) and cash generation is strong (FCF growth 229.8% TTM; operating cash flow to net income 1.14).

Income Statement

Alkermes shows strong profitability with a high gross profit margin of 86.04% and a net profit margin of 22.27% in the TTM period. The company has demonstrated a positive revenue growth rate of 6.6% in the TTM, recovering from a decline in the previous year. EBIT and EBITDA margins are also robust at 26.66% and 28.64%, respectively, indicating efficient operations and cost management.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.041, reflecting minimal leverage and financial risk. The return on equity is strong at 21.40%, showcasing effective use of equity to generate profits. The equity ratio stands at 74.42%, indicating a strong equity base relative to total assets, enhancing financial stability.

Cash Flow

Cash flow performance is impressive, with a significant free cash flow growth rate of 229.8% in the TTM. The operating cash flow to net income ratio is healthy at 1.14, suggesting strong cash generation relative to profits. The free cash flow to net income ratio of 0.91 further supports the company's ability to convert earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.52B	1.56B	1.66B	1.11B	1.17B	1.04B
Gross Profit	1.31B	1.31B	1.41B	893.73M	976.43M	860.44M
EBITDA	435.78M	494.86M	519.48M	59.77M	177.60M	-6.02M
Net Income	338.83M	367.07M	355.76M	-158.27M	-48.17M	-110.86M
Balance Sheet
Total Assets	2.33B	2.06B	2.14B	1.96B	2.02B	1.95B
Cash, Cash Equivalents and Short-Term Investments	1.11B	751.67M	773.49M	608.47M	536.31M	635.03M
Total Debt	71.60M	75.54M	372.19M	379.44M	416.21M	410.16M
Total Liabilities	596.08M	590.59M	933.54M	920.23M	911.90M	882.75M
Stockholders Equity	1.73B	1.46B	1.20B	1.04B	1.11B	1.07B
Cash Flow
Free Cash Flow	490.87M	405.64M	353.31M	-17.21M	72.69M	40.62M
Operating Cash Flow	541.08M	439.12M	401.35M	21.04M	101.72M	82.84M
Investing Cash Flow	-40.72M	-111.31M	53.36M	-64.54M	-66.20M	-11.48M
Financing Cash Flow	-280.20M	-494.14M	-289.71M	-1.57M	29.07M	-2.17M

Alkermes Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 34.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALKS, the sentiment is Positive. The current price of 34.96 is above the 20-day moving average (MA) of 32.08, above the 50-day MA of 30.00, and above the 200-day MA of 29.57, indicating a bullish trend. The MACD of 1.44 indicates Negative momentum. The RSI at 67.08 is Neutral, neither overbought nor oversold. The STOCH value of 75.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALKS.

Alkermes Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRYS	79 Outperform	$8.19B	41.93	19.66%	―	54.51%	275.94%
ALKS	78 Outperform	$5.77B	17.05	22.35%	―	1.08%	3.40%
PTCT	70 Outperform	$6.01B	8.75	―	―	97.54%	―
TGTX	62 Neutral	$4.63B	10.70	111.96%	―	100.88%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CRSP	50 Neutral	$4.76B	―	-25.33%	―	-81.10%	-99.21%

Alkermes Corporate Events

Alkermes plans Avadel acquisition to expand sleep portfolio

In 2025, Alkermes generated more than $1.45 billion in commercial revenues with strong cash flow and profitability and laid out a 2026 plan centered on driving growth in neuroscience and leading innovation in orexin 2 receptor agonists for sleep disorders. The company reported positive multi-week phase 2 Vibrance data in 2025 for its orexin 2 receptor agonist alixorexton in both narcolepsy type 1 and type 2, showing statistically significant and clinically meaningful improvements in wakefulness, excessive daytime sleepiness, cataplexy, fatigue and cognition with a favorable safety profile, leading to an FDA Breakthrough Therapy designation in narcolepsy type 1 and supporting the launch of a registrational phase 3 narcolepsy program in the first quarter of 2026. Management positions orexin 2 receptor agonists as a multi‑billion‑dollar opportunity, estimating a market of more than $10 billion across narcolepsy and idiopathic hypersomnia, underpinned by a large base of undertreated patients and an existing oxybate market exceeding $1.8 billion in 2024 revenues. The planned acquisition of Avadel in 2026, together with ongoing phase 2 work in idiopathic hypersomnia and anticipated phase 3 data for LUMRYZ in that indication, is designed to accelerate Alkermes’ entry into the commercial sleep medicine market, augment its revenue growth and profitability profile, and establish the company as a leader in a new therapeutic category within central disorders of hypersomnolence.

The most recent analyst rating on (ALKS) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on Alkermes stock, see the ALKS Stock Forecast page.

Alkermes Gains FDA Breakthrough Status for Narcolepsy Drug

On January 6, 2026, Alkermes announced that the U.S. Food and Drug Administration granted Breakthrough Therapy designation to alixorexton, its oral, selective orexin 2 receptor agonist, for the treatment of narcolepsy type 1, following encouraging phase 1 and phase 2 data, including positive results from the 92-patient Vibrance-1 study. In that phase 2 trial, alixorexton met its primary endpoint at all tested doses, showing statistically significant, clinically meaningful and dose-dependent improvements in wakefulness versus placebo on the Maintenance of Wakefulness Test, and was generally well tolerated, prompting Alkermes to plan initiation of a global phase 3 program for narcolepsy in the first quarter of 2026, a move that could strengthen its position in sleep-disorder therapeutics and potentially establish alixorexton as a new standard of care in narcolepsy type 1 if late-stage data and regulatory review are favorable.

The most recent analyst rating on (ALKS) stock is a Buy with a $37.00 price target. To see the full list of analyst forecasts on Alkermes stock, see the ALKS Stock Forecast page.

Alkermes Increases Offer for Avadel Acquisition

On November 18, 2025, Alkermes plc and Avadel Pharmaceuticals plc amended their transaction agreement, increasing the cash consideration for the acquisition of Avadel to $21.00 per share, while maintaining the contingent value right terms. This move followed Avadel’s receipt of a superior proposal from H. Lundbeck A/S, which was later deemed inferior to Alkermes’ revised offer. Additionally, Alkermes entered into an amended bridge loan agreement to finance the acquisition, ensuring compliance with Irish Takeover Code requirements. The acquisition is expected to close in the first quarter of 2026.

The most recent analyst rating on (ALKS) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Alkermes stock, see the ALKS Stock Forecast page.

Alkermes Announces Positive Results from Vibrance-2 Study

On November 12, 2025, Alkermes announced positive topline results from its Vibrance-2 phase 2 study, which evaluated the safety and efficacy of alixorexton in patients with narcolepsy type 2. The study demonstrated that alixorexton, a novel oral orexin 2 receptor agonist, met its dual primary endpoints by significantly improving wakefulness and reducing excessive daytime sleepiness compared to placebo. These results support the advancement of alixorexton to phase 3 trials, marking a significant milestone for the narcolepsy patient community and Alkermes’ development program.

The most recent analyst rating on (ALKS) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Alkermes stock, see the ALKS Stock Forecast page.