Biotech company BioMarin Pharmaceutical (NASDAQ:BMRN) reported revenue ahead of Wall Street’s expectations in Q4 CY2024, with sales up 15.6% year on year to $747.3 million. The company’s full-year revenue guidance of $3.15 billion at the midpoint came in 1.5% above analysts’ estimates. Its non-GAAP profit of $0.92 per share was 24.6% above analysts’ consensus estimates.
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BioMarin Pharmaceutical (BMRN) Q4 CY2024 Highlights:
"Our operational transformation and strong financial execution in 2024 is the first step in BioMarin's ambitious multiyear growth plan," said Alexander Hardy, President and Chief Executive Officer of BioMarin.
Company Overview
Founded in 1997, BioMarin Pharmaceutical (NASDAQ:BMRN) is a biopharmaceutical company specializing in developing and commercializing innovative therapies for rare genetic disorders, with key products addressing disorders where the body can’t break down certain sugars (Morquio A syndrome) and certain proteins (phenylketonuria).
Therapeutics
Over the next few years, therapeutic companies, which develop a wide variety of treatments for diseases and disorders, face strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, BioMarin Pharmaceutical grew its sales at a decent 10.9% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. BioMarin Pharmaceutical’s annualized revenue growth of 16.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated.
This quarter, BioMarin Pharmaceutical reported year-on-year revenue growth of 15.6%, and its $747.3 million of revenue exceeded Wall Street’s estimates by 4.8%.
Looking ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and indicates the market sees some success for its newer products and services.
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Operating Margin
BioMarin Pharmaceutical was profitable over the last five years but held back by its large cost base. Its average operating margin of 5% was weak for a healthcare business.
On the plus side, BioMarin Pharmaceutical’s operating margin rose by 14.8 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 4.2 percentage points on a two-year basis.
in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
BioMarin Pharmaceutical’s EPS grew at an astounding 30.8% compounded annual growth rate over the last five years, higher than its 10.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into BioMarin Pharmaceutical’s earnings to better understand the drivers of its performance. As we mentioned earlier, BioMarin Pharmaceutical’s operating margin expanded by 14.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q4, BioMarin Pharmaceutical reported EPS at $0.92, up from $0.49 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects BioMarin Pharmaceutical’s full-year EPS of $3.48 to grow 15.6%.
Key Takeaways from BioMarin Pharmaceutical’s Q4 Results
We enjoyed seeing BioMarin Pharmaceutical exceed analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid quarter. The stock traded up 7.4% to $70.52 immediately after reporting.
BioMarin Pharmaceutical put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free .
