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NovoCure Ltd (NVCR)
NASDAQ:NVCR
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NovoCure
(NASDAQ:NVCR)43Neutral
Positive Factors
Clinical Trials
The successful Phase 3 PANOVA-3 trial in pancreatic cancer demonstrated a statistically significant improvement in overall survival, strengthening the clinical evidence supporting TTFields therapy.
Regulatory Approvals
The FDA granted Breakthrough Device designation for TTFields therapy in both brain metastases from NSCLC and unresectable, locally advanced pancreatic cancer, potentially accelerating market entry.
Negative Factors
Prescription Trends
Prescriptions for Optune Gio shrunk overall in 4Q24 with 1,520 received in the quarter compared to 1,586 in 3Q24, a 4% decrease.
NovoCure (NVCR) vs. S&P 500 (SPY)
Market Cap
$2.00B
Dividend YieldN/A
Average Volume (3M)948.68K
Price to Earnings (P/E)―
Beta (1Y)1.81
Revenue Growth18.82%
EPS Growth19.76%
CountryUS
Employees1,453
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-1.56
Shares Outstanding109,915,430
10 Day Avg. Volume1,375,190
30 Day Avg. Volume948,684
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.30
Price to Cash Flow (P/CF)-144.80
P/FCF Ratio325.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.20Price Target Upside99.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
NovoCure Business Overview & Revenue Model
Company DescriptionNovoCure (NVCR) is a global oncology company pioneering a novel therapy called Tumor Treating Fields (TTFields) for the treatment of solid tumors. The company operates in the healthcare sector, focusing on the development and commercialization of non-invasive, portable devices that utilize electric fields to disrupt cancer cell division. NovoCure's core product, Optune, is approved for the treatment of glioblastoma, a type of brain cancer, and the company is actively researching its application for other types of solid tumors.
How the Company Makes MoneyNovoCure generates revenue primarily through the sale and leasing of its TTFields therapy devices, particularly Optune, to healthcare providers and patients. The company's revenue model is centered on a durable medical equipment model, where patients typically rent the devices for the duration of their treatment. NovoCure also earns revenue from reimbursement by insurance companies and government health programs, as TTFields therapy is increasingly recognized and covered by these entities. Additionally, the company engages in partnerships and collaborations with research institutions and pharmaceutical companies to expand the potential indications for its technology, which may contribute to future revenue growth.
NovoCure Financial Statement Overview
Summary
NovoCure is experiencing revenue growth, but profitability and cash flow remain areas of concern. The company's financial health is impacted by ongoing net losses, negative margins, and cash flow challenges. While the balance sheet shows some stability, increasing debt levels and negative returns on equity highlight potential risks.Income Statement
NovoCure's revenue has experienced moderate growth, with a 18.8% increase from 2023 to 2024. However, the company has consistently posted net losses, resulting in a negative net profit margin. The EBIT and EBITDA margins have also been negative, indicating ongoing operational challenges. Despite some revenue growth, profitability remains a significant issue.45
Neutral
Balance Sheet
The company's balance sheet shows a reasonable equity base, but the debt-to-equity ratio has increased to 0.26 in 2024, indicating rising leverage. The equity ratio remains stable at 0.66, suggesting that equity still constitutes a significant portion of the total assets. However, the persistent net losses have impacted the return on equity negatively.55
Neutral
Cash Flow
NovoCure has been facing challenges in generating positive cash flows. The operating cash flow to net income ratio has been negative, indicating cash flow issues. Free cash flow has also been negative, posing risks to liquidity. Although there was a slight improvement in free cash flow from 2023 to 2024, the overall cash flow situation remains weak.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 605.22M | 509.34M | 537.84M | 535.03M | 494.37M | Gross Profit |
| 468.04M | 381.06M | 422.97M | 420.15M | 387.87M | EBIT |
| -170.50M | -232.87M | -89.52M | -44.33M | 21.25M | EBITDA |
| -109.58M | -175.87M | -63.11M | -38.38M | 45.30M | Net Income Common Stockholders |
| -168.63M | -207.04M | -92.53M | -58.35M | 19.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 959.87M | 910.62M | 969.42M | 937.70M | 842.58M | Total Assets |
| 1.24B | 1.15B | 1.19B | 1.14B | 1.05B | Total Debt |
| 93.13M | 596.24M | 584.27M | 575.21M | 444.20M | Net Debt |
| 93.13M | 355.42M | 468.94M | 366.41M | 209.52M | Total Liabilities |
| 880.61M | 783.63M | 750.48M | 729.00M | 575.46M | Stockholders Equity |
| 360.18M | 362.50M | 441.17M | 410.49M | 476.53M |
| Cash Flow | Free Cash Flow | |||
| -69.22M | -100.43M | 9.43M | 58.59M | 84.18M | Operating Cash Flow |
| -26.37M | -73.34M | 30.79M | 82.76M | 99.15M | Investing Cash Flow |
| -140.24M | 184.15M | -139.96M | -144.83M | -472.85M | Financing Cash Flow |
| 90.31M | 15.79M | 15.49M | 25.70M | 440.21M |
NovoCure Technical Analysis
Negative
19.15
Price Trends
25.14
Negative
22.78
Negative
20.81
Negative
Market Momentum
-1.64
Positive
33.53
Neutral
24.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVCR, the sentiment is Negative. The current price of 19.15 is below the 20-day moving average (MA) of 21.18, below the 50-day MA of 25.14, and below the 200-day MA of 20.81, indicating a bearish trend. The MACD of -1.64 indicates Positive momentum. The RSI at 33.53 is Neutral, neither overbought nor oversold. The STOCH value of 24.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NVCR.
NovoCure Risk Analysis
NovoCure disclosed 42 risk factors in its most recent earnings report. NovoCure reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NovoCure Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $18.94B | 46.78 | 43.03% | ― | 22.07% | 101.95% | |
71 Outperform | $20.70B | 23.46 | 7.24% | 0.92% | 3.84% | -9.29% | |
56 Neutral | $1.69B | ― | -0.44% | ― | 4.47% | -110.70% | |
56 Neutral | $1.30B | ― | -33.30% | ― | 25.74% | 57.18% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
46 Neutral | $2.63B | ― | -50.74% | ― | -7.03% | -20233.78% | |
43 Neutral | $2.00B | ― | -46.67% | ― | 18.82% | 19.76% |
* Healthcare Sector Average
Performance Comparison
NVCR
NovoCure
19.15
1.86
10.76%
PODD
Insulet
270.81
95.32
54.32%
IART
Integra Lifesciences
21.87
-14.23
-39.42%
QDEL
QuidelOrtho
39.67
-5.06
-11.31%
ZBH
Zimmer Biomet Holdings
104.75
-21.52
-17.04%
TNDM
Tandem Diabetes Care
19.11
-10.56
-35.59%
NovoCure Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -12.80% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
NovoCure's earnings call reflects strong overall performance and significant achievements, particularly in expanding indications and clinical trial successes. However, challenges with reimbursement, increased operating expenses, and potential gross margin headwinds indicate areas of concern that need to be addressed.Highlights
Revenue Growth and Financial Performance
NovoCure generated $605 million in net revenue for 2024, a 19% increase year-over-year, with a 21% increase in Q4 2024 compared to the same period in 2023. The company achieved a gross margin of 77% for the year, up from 75% in 2023, driven by improved US approval rates.
Expansion into New Indications
Received FDA approval for the treatment of second-line non-small cell lung cancer with Optune Lua. Achieved successful Phase 3 readouts for METIS (brain mets from non-small cell lung cancer) and PANOVA-3 (locally advanced pancreatic cancer), marking a pivotal expansion from a single indication to a multi-indication platform.
Clinical Trial Success
METIS trial met its primary endpoint with patients exhibiting 21.9 months median time to intracranial progression. PANOVA-3 trial demonstrated a median overall survival of 16.2 months, showing significant benefits in difficult-to-treat populations.
Product Development Milestones
Approved HFE arrays in the US and Japan, which are thinner, lighter, and more flexible, aiming to improve patient usage and expand market reach.
Lowlights
Reimbursement and Revenue Ramp Challenges
While early demand for Optune Lua in lung cancer is promising, reimbursement negotiations are ongoing, with material revenue expected to ramp in 2026 as coverage expands.
Increased Operating Expenses
Sales and marketing expenses increased by 14% in Q4 2024 and G&A expenses rose by 84%, primarily driven by stock-based compensation. These increases impact the net loss, which was $169 million for the year.
Potential Gross Margin Headwinds
The launch of new HFE arrays and the lung cancer product launch are expected to be headwinds to gross margin in 2025.
China Market Uncertainty
Sequential revenue decline in China attributed to timing and the ending of royalty amortization, raising concerns about future growth in this region.
Company Guidance
In the NovoCure Fourth Quarter 2024 Earnings Conference Call, the company detailed significant progress and provided guidance for 2025. Key achievements for 2024 included generating $605 million in net revenue and increasing the global active patient count to over 4,000, with growth driven by strong performance in markets like France, Germany, and Japan. The company also highlighted its successful expansion beyond glioblastoma (GBM) to include FDA-approved treatments for non-small cell lung cancer, brain metastases from non-small cell lung cancer, and locally advanced pancreatic cancer. NovoCure's strategic focus for 2025 involves further growth in these new indications, with expectations of substantial revenue contributions from the lung cancer launch by 2026. Despite a net loss of $169 million for the year, the company reported an adjusted EBITDA of $1 million and maintained a strong cash position of $960 million, aiming for future profitability as they expand their market reach.NovoCure Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
NovoCure’s TTFields Therapy Shows Promise in PANOVA-3 Trial
Positive
Dec 2, 2024
Novocure’s Phase 3 PANOVA-3 trial has shown promising results in treating unresectable, locally advanced pancreatic cancer with Tumor Treating Fields (TTFields) therapy, improving median overall survival by 2 months compared to standard treatment. The study, which is paving the way for regulatory approval in major markets, highlights TTFields as a well-tolerated and effective first-line therapy option, offering hope for better outcomes in a notoriously challenging cancer type.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.