Galapagos (GLPG) AI Stock Analysis

• Market Cap: $2.11B
• Dividend Yield: N/A
• Average Volume (3M): 242.19K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.84
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 704
• Sector: Healthcare
• Sector Strength: 44
• Industry: Biotechnology
• EPS (TTM): -1.85
• Shares Outstanding: 65,897,070
• 10 Day Avg. Volume: 171,324
• 30 Day Avg. Volume: 242,188
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: -0.85
• Enterprise Value/Revenue: -6.53
• Enterprise Value/Gross Profit: -12.48
• Enterprise Value/Ebitda: 4.97
• 1Y Price Target: $26.00
• Price Target Upside: -18.44% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 56 Neutral
• Price Target: $34.00 ▲(6.65% Upside)

The overall stock score reflects significant financial challenges, particularly in cash flow and profitability, overshadowed by strong technical indicators suggesting positive market momentum. While the company has strategic plans to expand its pipeline and manufacturing, high restructuring costs and anticipated cash burn remain key concerns.

Positive Factors

Strong Cash Position

A robust cash position provides Galapagos with the financial flexibility to fund its operations and accelerate its cell therapy pipeline, supporting strategic initiatives and long-term growth.

Pipeline Expansion

The initiation of the ATALANTA-1 study marks a significant milestone in expanding Galapagos's clinical pipeline, enhancing its potential for future product approvals and market expansion.

Decentralized Manufacturing Expansion

The expansion of decentralized manufacturing units improves access to therapies and reduces logistical constraints, supporting pivotal studies and commercial readiness, which is crucial for long-term operational efficiency.

Negative Factors

High Cash Burn

The anticipated high cash burn post-SpinCo separation poses a significant financial challenge, potentially impacting the company's ability to sustain operations without additional funding.

Restructuring Costs

Significant restructuring costs impact financial results, reducing profitability and adding pressure on cash flow, which may hinder short-term financial stability and require strategic adjustments.

Negative Profitability

Negative profitability indicates ongoing financial distress, highlighting the need for strategic shifts to achieve sustainable growth and improve shareholder value over the long term.

Galapagos Business Overview & Revenue Model

Company Description

Galapagos NV, an integrated biopharmaceutical company, engages in the discovery, development, and commercialization of various medicines for high unmet medical need. Its pipeline products include filgotinib, a JAK1 inhibitor that is in various phases of clinical trials for the treatment of rheumatoid arthritis, Crohn's disease, ulcerative colitis, small bowel CD, fistulizing CD, ankylosing spondylitis, psoriatic arthritis, and uveitis. The company's pipeline products also comprise GLPG1972 that has completed Phase 2b trial for treating osteoarthritis; Toledo molecules, including GLPG3970, GLPG4399, and GLPG4876 for inflammation; and GLPG4716 and Ziritaxestat to treat idiopathic pulmonary fibrosis. In addition, its other pipeline products include GLPG2737, a cystic fibrosis transmembrane conductance regulator that is in Phase 2 clinical trials to treat patients with autosomal dominant polycystic kidney disease; and GLPG0555, a JAK1 inhibitor, which is in Phase 1b for treatment of patients with osteoarthritis. The company has collaboration agreements with Gilead Sciences, Inc.; AbbVie S.à r.l.; and Novartis Pharma AG. Galapagos NV was incorporated in 1999 and is headquartered in Mechelen, Belgium.

How the Company Makes Money

Galapagos generates revenue primarily through the development and commercialization of its pharmaceuticals. The company earns money from several key revenue streams: milestone payments from partnerships with larger pharmaceutical companies, royalties from sales of partnered products, and potentially revenue from its own marketed products once they are approved. Significant partnerships, such as those with Gilead Sciences, contribute to Galapagos's earnings through upfront payments and success-based milestones as products progress through clinical trials. Additionally, grants and collaborations with academic institutions may also supplement its income.

Galapagos Financial Statement Overview

Summary

Galapagos faces significant financial challenges, including negative profitability and cash flow issues. Despite a strong balance sheet with low leverage, the company struggles with operating losses and cash burn, posing a substantial risk to its financial stability.

Income Statement

The income statement reveals significant challenges for Galapagos, with declining revenues and negative profitability metrics. The TTM gross profit margin is approximately 52.34%, indicating some level of cost control. However, the net profit margin is deeply negative at -103.14% for TTM, highlighting the company's struggle to generate profit. Revenue has seen a slight decline from the previous annual period, and the company has operated at a loss with negative EBIT and EBITDA margins. These figures suggest financial distress and a need for strategic shifts to achieve profitability.

Balance Sheet

Galapagos maintains a strong equity position, with a debt-to-equity ratio of 0.0032, reflecting minimal reliance on debt. The equity ratio stands at 69.23%, indicating that a significant portion of the company’s assets is financed by equity. The return on equity is negative due to the net losses. The low leverage is a positive aspect, providing financial stability and reducing risk, but the company needs to improve profitability to enhance shareholder value.

Cash Flow

Cash flow analysis shows negative free cash flow of -297.68 million in TTM, highlighting cash burn issues. Although investing cash flow is positive, largely due to divestments, operating cash flow remains negative. The operating cash flow to net income ratio is negative due to losses, suggesting inefficiencies in core operations. The cash flow situation is concerning and requires attention to ensure long-term liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	275.61M	275.65M	239.72M	505.28M	484.85M	478.05M
Gross Profit	144.23M	-94.67M	203.74M	493.20M	483.22M	-45.61M
EBITDA	-362.14M	-152.94M	51.04M	-33.37M	-100.93M	-294.52M
Net Income	-284.27M	74.08M	211.70M	-217.99M	-125.42M	-311.00M
Balance Sheet
Total Assets	3.82B	4.14B	4.36B	4.73B	5.19B	5.72B
Cash, Cash Equivalents and Short-Term Investments	3.09B	3.12B	3.68B	4.09B	4.70B	5.16B
Total Debt	8.44M	11.72M	9.60M	21.90M	26.86M	29.44M
Total Liabilities	1.17B	1.24B	1.56B	2.21B	2.55B	3.05B
Stockholders Equity	2.64B	2.90B	2.80B	2.53B	2.64B	2.67B
Cash Flow
Free Cash Flow	-297.68M	-402.14M	-425.24M	-537.49M	-561.71M	-518.65M
Operating Cash Flow	-278.55M	-320.03M	-405.97M	-500.54M	-503.83M	-427.34M
Investing Cash Flow	284.37M	220.60M	71.19M	-1.25B	541.24M	757.29M
Financing Cash Flow	-4.30M	-4.92M	-5.00M	-1.49M	-3.88M	22.04M

Galapagos Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 31.88
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLPG, the sentiment is Neutral. The current price of 31.88 is below the 20-day moving average (MA) of 32.17, below the 50-day MA of 31.89, and above the 200-day MA of 27.69, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 48.29 is Neutral, neither overbought nor oversold. The STOCH value of 46.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GLPG.

Galapagos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGIO	60 Neutral	$2.11B	3.29	64.05%	―	30.57%	―
ARWR	57 Neutral	$4.11B	―	-34.80%	―	2816.21%	73.33%
KYMR	57 Neutral	$3.36B	―	-33.26%	―	-49.51%	-44.09%
GLPG	56 Neutral	$2.11B	21.22	-10.10%	―	―	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
BEAM	50 Neutral	$2.08B	―	-41.94%	―	-82.90%	-155.64%
DNLI	45 Neutral	$1.92B	―	-39.69%	―	-100.00%	1.62%