Galapagos (GLPG) AI Stock Analysis

• Market Cap: €1.95B
• Dividend Yield: N/A
• Average Volume (3M): 132.01K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.82
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: NL
• Employees: 704
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 11.88
• Shares Outstanding: 65,897,070
• 10 Day Avg. Volume: 76,560
• 30 Day Avg. Volume: 132,014
• PEG Ratio: 0.08
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 6.79
• P/FCF Ratio: -6.78
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €23.50
• Price Target Upside: -17.25% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: €33.00 ▲(16.20% Upside)
• Action: Upgraded Date: 02/25/26
• Date: Action: Upgraded 02/25/26

The score is primarily supported by a very strong, low-leverage balance sheet and an improved 2025 income statement, tempered by the most significant risk: consistently negative operating and free cash flow. Technicals are modestly constructive (price above key moving averages) and valuation is favorable on a low P/E, though there is no dividend yield support.

Positive Factors

Balance Sheet Strength

Very low leverage and multi‑billion equity provide durable financial flexibility to fund R&D, pursue partnerships or absorb cash burn for multiple quarters without immediate refinancing. This structural strength supports strategic optionality and resilience through biotech development cycles.

Revenue & Profitability Rebound

A sharp revenue and EBIT rebound in 2025 signals successful commercialization or milestone recognition and demonstrates the company can generate meaningful operating profits when key programs monetize. This shift supports reinvestment capacity and validates the business model beyond pre-commercial stages.

Partnership & Program Optionality

Gilead's temporary waiver is a structural positive: it increases Galapagos' ability to seek external partners for a Phase 3‑enabling asset, expanding commercialization routes and negotiation leverage. That durable increase in deal optionality can accelerate program advancement and diversify future revenue sources.

Negative Factors

Persistent Cash Burn

Consistent negative operating and free cash flow creates ongoing reliance on cash reserves or external financing despite a strong balance sheet. Over 2–6 months this elevates refinancing and dilution risk and constrains freedom to expand programs without clear near‑term cash generation improvements.

Exit of Cell Therapy Business

Winding down cell therapy removes a potentially high‑value, differentiated franchise and reduces pipeline diversification. Even with strong Phase 2 CAR‑T efficacy, exiting this area lowers long‑term growth optionality and forfeits future upside from proprietary cell therapy innovations.

Volatile Historical Earnings

An uneven earnings history with prior multi-year losses indicates underlying revenue and margin volatility. This limits predictability of future cash generation and increases execution risk for sustained profitability, making long‑term planning and partner negotiations more complex.

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 commercialization of its pharmaceutical products, particularly from partnerships and collaborations with larger pharmaceutical companies. The company's revenue model includes milestone payments, royalties from product sales, and upfront payments from strategic collaborations. Significant partnerships, such as the collaboration with Gilead Sciences for the development and commercialization of filgotinib, contribute substantially to its earnings through shared profits and co-development agreements. Additionally, Galapagos may receive funding from grants or research initiatives aimed at advancing its drug development pipeline.

Galapagos Financial Statement Overview

Summary

Strong balance sheet strength (very low debt and sizable equity) and a sharp profitability rebound in 2025 are key positives, but persistent negative operating and free cash flow through 2025 is a major quality/sustainability concern for earnings.

Income Statement

Profitability improved materially in 2024–2025, culminating in strong 2025 revenue of ~€1.11B (up ~288% year over year) and solid earnings (EBIT ~€470M; net income ~€321M). Gross profit has also been consistently high in recent years (notably 2024 and 2025). Offsetting this, results were volatile earlier (losses in 2020–2022 and negative EBIT in multiple years), highlighting an uneven earnings profile typical of biotech and potential reliance on non-recurring revenue sources.

Balance Sheet

The balance sheet is a clear strength: debt is minimal (roughly €10–30M across periods) against multi-billion equity (equity ~€3.24B in 2025), implying very low leverage and strong financial flexibility. Equity has generally trended higher from 2022 to 2025. A watch item is the decline in total assets from 2022 to 2025, suggesting balance sheet shrinkage over time even as leverage remains very conservative.

Cash Flow

Cash generation is the main weakness: operating cash flow and free cash flow are consistently negative from 2020 through 2025 (e.g., 2025 operating cash flow about -€197M and free cash flow about -€211M). While cash burn improved versus 2024, the business is still not self-funding on cash flow, which can increase dependence on existing cash reserves or future financing despite reported profitability in some years.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.11B	275.65M	239.72M	505.28M	484.85M
Gross Profit	1.08B	240.79M	203.74M	493.20M	483.22M
EBITDA	469.66M	43.33M	43.38M	-33.37M	-100.93M
Net Income	320.88M	74.08M	211.70M	-217.99M	-125.42M
Balance Sheet
Total Assets	3.41B	4.14B	4.36B	4.73B	5.19B
Cash, Cash Equivalents and Short-Term Investments	3.00B	3.12B	3.68B	4.09B	4.70B
Total Debt	12.10M	11.72M	9.60M	21.90M	26.86M
Total Liabilities	170.65M	1.24B	1.56B	2.21B	2.55B
Stockholders Equity	3.24B	2.90B	2.80B	2.53B	2.64B
Cash Flow
Free Cash Flow	-210.71M	-402.14M	-425.24M	-537.49M	-561.71M
Operating Cash Flow	-197.01M	-320.03M	-405.97M	-500.54M	-503.83M
Investing Cash Flow	228.37M	220.60M	71.19M	-1.25B	541.24M
Financing Cash Flow	-3.27M	-4.92M	-5.00M	-1.49M	-3.88M

Galapagos Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 28.40
• 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 NL:GLPG, the sentiment is Neutral. The current price of 28.4 is below the 20-day moving average (MA) of 28.57, above the 50-day MA of 28.23, and above the 200-day MA of 27.26, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 48.91 is Neutral, neither overbought nor oversold. The STOCH value of 53.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NL:GLPG.

Galapagos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GLPG	71 Outperform	€1.95B	6.07	-16.72%	―	―	―
PHARM	62 Neutral	€1.01B	-7,185.00	0.44%	―	24.19%	99.16%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
VVY	42 Neutral	€43.00M	-3.03	-145.47%	―	―	―