Grifols SA (GRFS) AI Stock Analysis

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Grifols SA

(NASDAQ:GRFS)

Rating:72Outperform

Price Target:

$11.00

▲(13.87%Upside)

Grifols SA's strong technical momentum and positive earnings call results drive the overall score, despite valuation concerns and financial performance challenges such as high leverage and low net profit margins. The robust growth in key segments and strategic initiatives to improve cash flow and profitability are significant positives.

Grifols SA (GRFS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$8.48B

Dividend YieldN/A

Average Volume (3M)931.48K

Price to Earnings (P/E)32.0

Beta (1Y)1.01

Revenue Growth9.67%

EPS Growth1.92%

CountryUS

Employees23,833

SectorHealthcare

Sector Strength37

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.09

Shares Outstanding261,425,100

10 Day Avg. Volume1,614,740

30 Day Avg. Volume931,476

Financial Highlights & Ratios

PEG Ratio2.12

Price to Book (P/B)1.35

Price to Sales (P/S)0.00

P/FCF Ratio10.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.30

Price Target Upside6.63% Upside

Rating ConsensusHold

Number of Analyst Covering1

Grifols SA Business Overview & Revenue Model

Company DescriptionGrifols, S.A. engages in the procurement, manufacture, preparation, and sale of therapeutic products, primarily hemoderivatives. The company operates through Bioscience, Hospital, Diagnostic, Bio Supplies, and Others divisions. The Bioscience division researches, develops, produces, and markets plasma-derived medicines and other innovative solutions to treat patients with chronic, rare, prevalent, and life-threatening diseases. It offers immunoglobulins, alpha-1 antitrypsin, albumin, clotting factors, and hyperimmune globulins. The Hospital division offers non-biological pharmaceutical products and medical supplies clinical nutrition, intravenous therapy, and medical devices. The Diagnostic division researches, develops, produces, and commercializes diagnostic products that span the healthcare continuumfrom prevention, screening, diagnosis, and prognosis to disease and treatment monitoringto serve professionals. The Bio Supplies division provides biological materials for life-science research, clinical trials, and for manufacturing pharmaceutical and diagnostic products. Its products and services are used by healthcare providers to diagnose and treat patients with hemophilia, immune deficiencies, infectious diseases, and other medical conditions. The company serves public and private customers; and wholesalers, distributors, group purchasing organizations, blood banks, hospitals and care institutions, and national health systems. Grifols, S.A. has a technology collaboration agreement with Mondragon. The company was founded in 1940 and is headquartered in Barcelona, Spain.

How the Company Makes MoneyGrifols SA primarily generates revenue through the sale of plasma-derived therapies, which are produced by its Bioscience division. This division is the largest contributor to the company's revenue, driven by the demand for its products in treating conditions such as hemophilia, primary immunodeficiencies, and alpha-1 antitrypsin deficiency. The Diagnostic division provides revenue through the sale of equipment and reagents used in blood testing and transfusion medicine. The Hospital division offers products for hospital pharmacy services, including solutions for intravenous therapy and clinical nutrition. Additionally, Grifols earns money through its Bio Supplies division, which supplies biological products for non-therapeutic use. Strategic partnerships with healthcare providers and research institutions, as well as investments in R&D, also play a vital role in sustaining and growing the company's revenue.

Grifols SA Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 36.06%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

Grifols reported strong Q1 2025 performance with record revenue and growth, particularly in the immunoglobulin franchise. Despite challenges like negative free cash flow due to a strategic payment and temporary albumin issues, the company showed robust adjusted EBITDA and continued deleveraging efforts. The results are ahead of plan even amidst macroeconomic uncertainties and IRA impacts.

Q1-2025 Updates

Positive Updates

Record Revenue and Growth in Q1 2025

Revenue in Q1 2025 reached EUR1.786 billion, a 7.4% increase on a constant currency basis. On a like-for-like basis, revenue increased by 10%.

Strong Adjusted EBITDA Performance

Adjusted EBITDA reached EUR400 million, an improvement of 14.2% at constant currency. Like-for-like, it grew by close to 22%.

Impressive Growth in Immunoglobulin Franchise

The immunoglobulin franchise achieved 17.5% growth in revenue at constant currency and like-for-like, with subcutaneous IG growing an impressive 91% at constant currency.

Improvement in Free Cash Flow

Free cash flow for the quarter was negative EUR44 million, but there was a year-on-year improvement of more than EUR200 million.

Continued Deleveraging

Leverage improved slightly from 4.6 times to under 4.5 times, marking a priority for the company.

Negative Updates

Negative Free Cash Flow Due to Strategic Payment

Free cash flow was negative EUR44 million, primarily due to a EUR79 million payment to ImmunoTek.

Temporary Albumin and Rabies Phasing Challenges

The phasing in albumins and rabies put some pressure on gross margin and EBITDA in Q1 '25.

Impact of IRA on Financial Performance

The difference between like-for-like and reported figures amounted to EUR43 million, with EUR28 million attributable to the IRA.

Albumin Sales Temporarily Affected

Albumin sales growth was temporarily affected by a standard license renewal process in China, resulting in a decline of 8.9% on a like-for-like basis.

Company Guidance

During the Q1 2025 earnings call, Grifols executives highlighted a robust start to the fiscal year, reporting revenue of EUR 1.786 billion—a 7.4% increase on a constant currency basis, which rises to 10% on a like-for-like basis. Adjusted EBITDA reached EUR 400 million, marking a 14.2% increase at constant currency and nearly 22% like-for-like. Despite a negative free cash flow of EUR 44 million, attributed to a EUR 79 million payment to ImmunoTek, the company achieved a year-on-year improvement in free cash flow by over EUR 200 million. The revenue growth was primarily driven by the biopharma segment, with the immunoglobulin franchise experiencing a 17.5% revenue increase on a constant currency basis. Management reaffirmed their 2025 guidance, anticipating continued revenue growth, enhanced profitability, and free cash flow improvements, underpinned by strategic initiatives and market dynamics.

Grifols SA Financial Statement Overview

Summary

Grifols SA shows strong revenue growth and improved operating margins, yet struggles with a low net profit margin and high leverage. The balance sheet indicates a need for careful debt management, while cash flow generation is strong but requires further improvement to enhance financial stability.

Income Statement

Positive

Grifols SA demonstrates strong revenue growth with a 9.41% increase from 2023 to 2024. The gross profit margin improved to 38.74%, indicating efficient cost management. However, the net profit margin remains relatively low at 2.18%, suggesting potential cost or operational inefficiencies. The EBIT margin increased to 16.53%, reflecting better operating performance.

Balance Sheet

Positive

The debt-to-equity ratio of 1.71 indicates a high level of leverage, which could pose risks if not managed properly. Return on equity is modest at 2.67%, suggesting room for improvement in profitability. The equity ratio of 27.49% highlights a stable asset base supported by equity, though there is reliance on debt.

Cash Flow

Positive

Grifols SA shows a significant improvement in free cash flow, turning positive in 2024. The operating cash flow to net income ratio of 5.75 reflects strong cash generation capacity relative to net profits. However, the free cash flow to net income ratio of 3.38 indicates that cash flow improvements are still needed to enhance financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.21B	6.59B	6.06B	4.93B	5.34B
Gross Profit	2.79B	2.32B	2.23B	1.96B	2.26B
EBITDA	1.48B	1.18B	1.16B	922.47M	1.37B
Net Income	156.92M	59.31M	208.28M	265.33M	618.55M
Balance Sheet
Total Assets	21.41B	21.44B	21.53B	19.23B	15.27B
Cash, Cash Equivalents and Short-Term Investments	1.00B	544.50M	591.24M	2.68B	590.51M
Total Debt	10.09B	10.12B	9.75B	9.32B	6.91B
Total Liabilities	12.80B	13.47B	13.08B	11.09B	8.55B
Stockholders Equity	5.88B	5.83B	6.13B	6.10B	5.11B
Cash Flow
Free Cash Flow	530.80M	-87.14M	-386.43M	281.89M	747.78M
Operating Cash Flow	902.17M	208.28M	-10.87M	596.98M	1.11B
Investing Cash Flow	886.67M	-397.64M	-1.98B	-29.39M	-858.12M
Financing Cash Flow	-1.36B	186.04M	-173.49M	1.47B	-354.40M

Grifols SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price9.66

Price Trends

50DMA

8.75

Positive

100DMA

8.10

Positive

200DMA

8.03

Positive

Market Momentum

MACD

0.36

Negative

RSI

59.44

Neutral

STOCH

53.20

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRFS, the sentiment is Positive. The current price of 9.66 is above the 20-day moving average (MA) of 9.35, above the 50-day MA of 8.75, and above the 200-day MA of 8.03, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 59.44 is Neutral, neither overbought nor oversold. The STOCH value of 53.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRFS.

Grifols SA Risk Analysis

Grifols SA disclosed 53 risk factors in its most recent earnings report. Grifols SA reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Grifols SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRFS	72 Outperform	$8.48B	32.02	3.34%	―	9.67%	1.92%
BMY	72 Outperform	$97.72B	18.03	31.99%	6.37%	4.62%	―
GILD	71 Outperform	$137.04B	23.17	32.51%	3.53%	4.63%	1144.01%
PFE	69 Neutral	$142.93B	18.22	8.62%	8.36%	13.38%	―
SNY	67 Neutral	$118.15B	20.29	7.34%	0.09%	-4.57%	2.96%
Sector *	60 Neutral	HK$16.88B	5.55	-7.44%	3.12%	11.55%	-28.15%
GSK	59 Neutral	$73.60B	18.99	22.26%	5.21%	4.17%	-29.96%

* Healthcare Sector Average

Performance Comparison

GRFS

Grifols SA

9.85

2.07

26.61%

BMY

Bristol-Myers Squibb

48.98

5.74

13.27%

GILD

Gilead Sciences

113.56

39.44

53.21%

GSK

GlaxoSmithKline

38.03

0.57

1.52%

PFE

Pfizer

25.36

-2.93

-10.36%

SNY

Sanofi

50.16

-1.30

-2.53%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2025