Ligand Pharma (LGND) AI Stock Analysis

• Market Cap: $3.90B
• Dividend Yield: N/A
• Average Volume (3M): 190.56K
• Price to Earnings (P/E): 92.3
• Beta (1Y): 0.97
• Revenue Growth: 64.83%
• EPS Growth: -9.12%
• Country: US
• Employees: 68
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 3.09
• Shares Outstanding: 19,681,720
• 10 Day Avg. Volume: 191,317
• 30 Day Avg. Volume: 190,562
• PEG Ratio: 4.53
• Price to Book (P/B): 2.36
• Price to Sales (P/S): 11.73
• P/FCF Ratio: 25.32
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 16.26
• Enterprise Value/Gross Profit: 18.93
• Enterprise Value/Ebitda: 40.89
• 1Y Price Target: $243.50
• Price Target Upside: 27.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $201.00 ▲(4.86% Upside)

Overall score reflects solid but uneven fundamentals (strong revenue growth and a stable balance sheet, but pressured margins and weaker free-cash-flow trends). Technicals are mixed with softer short-term momentum, and valuation is a notable headwind given the very high P/E. The latest earnings call was a positive offset due to raised guidance and strong royalty/EPS growth.

Positive Factors

Diversified Revenue Model

Ligand's mix of licensing, milestone and royalty revenues tied to partner drug sales produces recurring, non-dilutive cash streams and milestone upside. This multi-channel model reduces single-product risk and provides durable revenue visibility as partner pipelines mature over multiple years.

Robust Royalty and Revenue Growth

Sustained royalty expansion and an explicit long-term CAGR target indicate durable, organic growth driven by partner product launches and market adoption. Recurring royalties from approved drugs create predictable cash flows and multiperiod revenue tailwinds, supporting long-term growth plans and reinvestment.

Strong Access to Capital

Successful convertible financing and the company's stated deployable capital position provide durable financial flexibility to fund business development, royalty purchases, and pipeline investments. Readily available capital reduces execution risk for long-term portfolio expansion strategies.

Negative Factors

Declining Free Cash Flow Conversion

A meaningful drop in free cash flow growth and subunitary FCF/net income means earnings are not fully converting to cash. Over the medium term this constrains internal funding for acquisitions or R&D and increases reliance on external financing to sustain growth initiatives and dividend-like distributions.

Compressed Gross Margins and Negative Operating Profit

A sharp decline in gross margin alongside negative EBIT points to structural cost or mix pressures that erode operating leverage. If sustained, lower core profitability reduces cash available for reinvestment and weakens the company's ability to scale margins as revenues grow, pressuring long-term returns.

Rising Operating Expenses and One-Time Charges

Higher G&A and sizable one-time R&D charges increase expense volatility and reduce near-term free cash flow. Repeated or elevated operating spend can undermine margin recovery and make meeting long-term royalty growth targets more capital intensive, requiring sustained cash generation or further financing.

Ligand Pharma Business Overview & Revenue Model

Company Description

Ligand Pharmaceuticals Incorporated, a biopharmaceutical company, focuses on developing or acquiring technologies that help pharmaceutical companies to discover and develop medicines worldwide. Its commercial programs include Kyprolis and Evomela, which are used to treat multiple myeloma; Veklury for the treatment of moderate or severe COVID-19; Teriparatide injection product for osteoporosis; Vaxneuvance for the prevention of invasive disease caused by Streptococcus pneumoniae; and Pneumosil, a pneumococcal conjugate vaccine to help fight against pneumococcal pneumonia among children. The company also offers Rylaze, a recombinant erwinia asparaginase for the treatment of acute lymphoblastic leukemia or lymphoblastic lymphoma in adult and pediatric patients; and Nexterone, a captisol-enabled formulation of amiodarone; and Zulresso, a captisol-enabled formulation of brexanolone for the treatment of postpartum depression. In addition, it provides Noxafil-IV, a captisol-enabled formulation of posaconazole for IV use; Duavee for the treatment of postmenopausal osteoporosis; Aziyo portfolio of commercial pericardial repair and CanGaroo envelope extracellular matrix products; Exemptia for autoimmune diseases; Vivitra for breast cancer; Bryxta and Zybev for various indications; and Minnebro for the treatment of hypertension. The company's partners and licenses programs, which are in clinical development used for the treatment of cancer, seizure, diabetes, cardiovascular disease, muscle wasting, liver and kidney disease, and other diseases. Further, it sells Captisol materials. The company was incorporated in 1987 and is headquartered in Emeryville, California.

How the Company Makes Money

Ligand Pharmaceuticals generates revenue through a diversified business model that includes licensing agreements, milestone payments, and royalties from its partnered programs. The company partners with large pharmaceutical firms that utilize Ligand's technologies in their drug development processes, receiving upfront payments and contingent milestone payments upon the achievement of specific regulatory or developmental milestones. Additionally, Ligand earns royalties on the sales of approved drugs that incorporate its technologies. Significant partnerships with major pharmaceutical companies bolster its revenue streams and provide a steady income reflecting the success of partnered drug candidates in the market.

Ligand Pharma Financial Statement Overview

Summary

Mixed fundamentals: strong TTM revenue growth (33.93%) and improved net margin (14.26%), supported by moderate leverage (debt-to-equity 0.47). Offsetting this are weaker profitability quality (gross margin down to 19.20%, negative EBIT margin) and declining free cash flow growth (-22.87%) with only moderate FCF conversion (FCF/net income 0.72).

Income Statement

Ligand Pharma's income statement shows a mixed performance. The TTM data indicates a strong revenue growth rate of 33.93%, which is a positive sign. However, the gross profit margin has significantly decreased to 19.20% from previous years, indicating potential cost management issues. The net profit margin improved to 14.26% in the TTM, showing profitability recovery. The EBIT margin is negative, suggesting operational challenges, while the EBITDA margin is relatively low at 5.63%.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.47 in the TTM, indicating moderate leverage. The return on equity is low at 4.21%, suggesting limited efficiency in generating returns from equity. The equity ratio is not explicitly calculated, but the company's equity position appears strong relative to its assets.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 22.87% in the TTM, which is concerning. The operating cash flow to net income ratio is healthy at 1.81, indicating good cash generation relative to net income. However, the free cash flow to net income ratio of 0.72 suggests that a significant portion of net income is not translating into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	251.23M	167.13M	131.31M	196.25M	241.54M	163.56M
Gross Profit	215.82M	156.06M	96.27M	143.42M	179.37M	133.14M
EBITDA	99.90M	40.79M	100.84M	81.20M	142.77M	56.67M
Net Income	48.58M	-4.03M	52.15M	-33.36M	57.14M	-2.98M
Balance Sheet
Total Assets	1.48B	941.77M	787.22M	762.67M	1.30B	1.36B
Cash, Cash Equivalents and Short-Term Investments	664.52M	256.17M	170.31M	211.87M	341.11M	411.19M
Total Debt	451.00M	7.11M	6.17M	87.75M	324.39M	456.41M
Total Liabilities	526.60M	111.33M	86.30M	165.18M	476.43M	652.76M
Stockholders Equity	950.17M	830.44M	700.91M	597.49M	821.16M	709.52M
Cash Flow
Free Cash Flow	30.76M	77.41M	-4.27M	119.93M	70.04M	50.13M
Operating Cash Flow	31.91M	97.05M	49.58M	137.85M	78.80M	54.59M
Investing Cash Flow	-378.82M	-143.66M	-11.68M	163.62M	30.52M	231.65M
Financing Cash Flow	20.46M	97.14M	-59.95M	-275.99M	-137.76M	-310.55M

Ligand Pharma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 191.69
• 50DMA: Positive
• 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 LGND, the sentiment is Positive. The current price of 191.69 is below the 20-day moving average (MA) of 197.76, below the 50-day MA of 195.59, and above the 200-day MA of 158.14, indicating a bullish trend. The MACD of 0.34 indicates Positive momentum. The RSI at 52.16 is Neutral, neither overbought nor oversold. The STOCH value of 52.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LGND.

Ligand Pharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRNX	64 Neutral	$4.86B	-9.88	-44.42%	―	―	-21.96%
LGND	63 Neutral	$3.90B	92.27	5.42%	―	64.83%	-9.12%
MLTX	55 Neutral	$1.07B	-4.44	-54.17%	―	―	-157.74%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
APLS	50 Neutral	$2.93B	75.99	14.10%	―	42.11%	―
SRRK	50 Neutral	$4.78B	-13.67	-218.04%	―	―	-31.71%
KYMR	50 Neutral	$6.13B	-21.12	-32.09%	―	-50.05%	-54.47%

Ligand Pharma Corporate Events

Ligand Pharma Highlights Broad Disclosure of Athira Investment

On December 18, 2025, Ligand Pharmaceuticals disclosed that it had posted materials related to its private placement investment in Athira Pharma on its investor relations website and certain social media platforms. The company reiterated that it distributes potentially material information through a broad set of public channels, including SEC filings, its website, press releases, conference calls, webcasts and its social media accounts, and urged investors and other stakeholders to monitor these outlets for updates, underscoring its emphasis on wide, non-exclusionary disclosure in line with regulatory requirements.

The most recent analyst rating on (LGND) stock is a Buy with a $231.00 price target. To see the full list of analyst forecasts on Ligand Pharma stock, see the LGND Stock Forecast page.