Lonza Group (LZAGY) AI Stock Analysis

• Market Cap: $49.30B
• Dividend Yield: 0.59%
• Average Volume (3M): 9.92K
• Price to Earnings (P/E): 59.0
• Beta (1Y): 0.79
• Revenue Growth: 8.41%
• EPS Growth: 33.09%
• Country: US
• Employees: 17,995
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.95
• Shares Outstanding: 702,290,200
• 10 Day Avg. Volume: 4,313
• 30 Day Avg. Volume: 9,922
• PEG Ratio: 264.66
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 5.77
• P/FCF Ratio: -265.11
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 7.69
• Enterprise Value/Gross Profit: 23.35
• Enterprise Value/Ebitda: 31.69
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 67 Neutral
• Price Target: $73.00 ▲(4.41% Upside)

Lonza Group's overall score is driven by a positive earnings call and solid financial performance, despite technical and valuation challenges. The company's strategic focus and upgraded guidance provide a favorable outlook, but high P/E ratio and cash flow issues warrant caution.

Lonza Group Business Overview & Revenue Model

Company Description

Lonza Group AG, together with its subsidiaries, supplies various products and services for pharmaceutical, biotech, and nutrition markets in Europe, North and Central America, Latin America, Asia, Australia and New Zealand, and internationally. It operates through Biologics, Small Molecules, Cell & Gene, and Capsules & Health Ingredients segments. The Biologics segment engages in the contract development and manufacturing of biopharmaceuticals for clinical and commercial manufacturing needs throughout the product lifecycle, including drug substance and drug product manufacturing. The Small Molecules segment operates as an integrated development and manufacturing service provider for small molecule drug substances and their intermediates. It supports customers across various aspects of design, development, and manufacturing. The Cell & Gene segment develops technologies and platforms that industrialize the manufacturing processes and production of cell and gene therapies. It also offers contract development and manufacturing services, and regulatory support for a range of allogeneic and autologous cell therapies, and exosome-based therapies, as well as viral vector gene therapies. In addition, this segment provides specialty raw materials and enabling technology solutions in cell and gene therapy, injectable drugs, vaccines, and bio-manufacturing markets. The Capsules & Health Ingredients segment offers capsules, dosage form solutions, and health ingredients for pharmaceutical and nutraceutical customers. The company was founded in 1897 and is headquartered in Basel, Switzerland.

How the Company Makes Money

Lonza generates revenue primarily through its two business segments: Pharma & Biotech, which includes services like custom manufacturing of APIs and biologics, and Specialty Ingredients, which offers products for personal care, nutrition, and microbial control. The company’s revenue model is driven by long-term contracts with pharmaceutical companies, which provide a steady income stream. Key revenue streams include contract manufacturing services, development services for new therapeutics, and sales of specialty chemical products. Additionally, Lonza has formed significant partnerships with leading biotech firms and pharmaceutical companies, enhancing its market position and driving growth through collaborative projects and shared innovation.

Lonza Group Financial Statement Overview

Summary

Lonza Group's financial performance is mixed. While profitability and operational efficiency are strong, challenges like inconsistent revenue growth and negative free cash flow due to high capital expenditures need attention. The balance sheet is stable with manageable debt, but increasing liabilities could pose future risks.

Income Statement

Lonza Group's income statement reflects stable revenue with a slight decline from the previous year. The gross profit margin and net profit margin are healthy, indicating good profitability. However, the revenue growth rate has been inconsistent, with a recent decrease. The EBIT and EBITDA margins show strong operational efficiency, but the net income has declined from its peak in 2021, suggesting some challenges in maintaining profitability growth.

Balance Sheet

The balance sheet is robust, with a solid equity base and a moderate debt-to-equity ratio, ensuring financial stability. Return on Equity (ROE) is positive but has declined, pointing to decreased efficiency in generating profits from shareholders' equity. The equity ratio is strong, indicating a healthy proportion of assets financed by shareholders' equity. However, the increase in total liabilities over time is a concern that needs monitoring.

Cash Flow

Lonza Group's cash flow situation shows mixed results. Operating cash flow remains strong, although free cash flow is negative, primarily due to significant capital expenditures. The operating cash flow to net income ratio suggests effective cash generation from operations, but the negative free cash flow to net income ratio highlights challenges in covering capital expenditures from operating activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.09B	6.57B	6.72B	6.22B	5.41B	4.51B
Gross Profit	2.34B	2.16B	1.95B	2.30B	1.97B	1.71B
EBITDA	1.72B	1.54B	1.53B	2.12B	1.31B	1.42B
Net Income	733.00M	636.00M	654.00M	1.22B	2.94B	869.00M
Balance Sheet
Total Assets	18.80B	19.73B	16.85B	17.56B	16.69B	14.63B
Cash, Cash Equivalents and Short-Term Investments	907.00M	1.71B	1.67B	2.22B	3.18B	495.00M
Total Debt	4.61B	5.12B	3.13B	2.59B	2.75B	3.81B
Total Liabilities	10.13B	10.35B	7.34B	6.89B	6.87B	7.74B
Stockholders Equity	8.62B	9.33B	9.45B	10.60B	9.75B	6.82B
Cash Flow
Free Cash Flow	-320.00M	-143.00M	-263.00M	-833.00M	-126.00M	163.00M
Operating Cash Flow	1.15B	1.27B	1.39B	1.04B	1.22B	1.14B
Investing Cash Flow	-1.97B	-2.92B	-1.10B	-991.00M	1.02B	-1.09B
Financing Cash Flow	343.00M	1.28B	-152.00M	-286.00M	-1.28B	93.00M

Lonza Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LZAGY, the sentiment is Positive. The current price of 69.92 is above the 20-day moving average (MA) of 68.42, above the 50-day MA of 69.17, and above the 200-day MA of 67.32, indicating a bullish trend. The MACD of 0.85 indicates Negative momentum. The RSI at 69.55 is Neutral, neither overbought nor oversold. The STOCH value of 99.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LZAGY.

Lonza Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
A	79 Outperform	$41.80B	34.58	19.88%	0.67%	4.48%	-11.52%
IQV	79 Outperform	$37.04B	31.85	19.80%	―	3.53%	-10.72%
TMO	78 Outperform	$215.96B	33.05	13.16%	0.29%	3.22%	8.26%
DHR	73 Outperform	$157.33B	45.84	6.84%	0.55%	2.22%	-7.60%
MTD	69 Neutral	$28.46B	36.42	―	―	3.11%	8.50%
LZAGY	67 Neutral	$49.30B	58.98	7.97%	0.59%	8.41%	33.09%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Lonza Group Corporate Events

Lonza Reports Strong Growth in 2025 Half-Year Earnings

Lonza Group Ltd, a leading global provider in the pharmaceutical and biotechnology sectors, specializes in contract development and manufacturing services, with a focus on biologics, advanced synthesis, and specialized modalities. In its latest half-year earnings report for 2025, Lonza reported robust financial performance with group sales reaching CHF 3.6 billion, marking a 19% growth at constant exchange rates. The company’s CORE EBITDA stood at CHF 1.1 billion, reflecting a margin improvement to 29.6%. The CDMO business, a significant contributor, delivered sales of CHF 3.1 billion, showcasing a 23.1% growth. Lonza’s Integrated Biologics segment experienced a remarkable 39.3% sales growth, driven by acquisitions and high demand, while Advanced Synthesis also showed strong performance with an 18.3% sales increase. However, Specialized Modalities faced a decline in sales due to pipeline variability and operational challenges. The Capsules & Health Ingredients segment remained stable, with expectations for recovery in the latter half of the year. Looking ahead, Lonza’s management remains optimistic, projecting continued growth in the CDMO segment and a steady recovery in the Capsules & Health Ingredients business, while anticipating improvements in Specialized Modalities in the second half of 2025.

Lonza’s Earnings Call: Strong Growth and Upgraded Outlook

The recent earnings call for Lonza painted a picture of strong financial performance and growth, particularly in the Contract Development and Manufacturing Organization (CDMO) segment. The company reported impressive results, leading to an upgraded guidance for the fiscal year. Despite facing challenges in the Specialized Modalities segment and currency fluctuations, the overall sentiment was robust and positive.