Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 13 May, 25 | EBS | Buy | USD 5.84 | USD 6.13 | USD 6.48 | 3 days | 11.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Emergent BioSolutions Inc., a life sciences company, provides preparedness and response solutions for accidental, deliberate, and naturally occurring public health threats in the United States. The company offers NARCAN Nasal Spray for the emergency treatment of known or suspected opioid overdose; Vaxchora vaccine for the prevention of cholera; Vivotif vaccine for oral administration for the prevention of typhoid fever; Anthrasil for the treatment of inhalational anthrax; BioThrax, an anthrax vaccine; CYFENDUS for post-exposure prophylaxis of disease following suspected or confirmed exposure to Bacillus anthracis; and Raxibacumab injection for the treatment and prophylaxis of inhalational anthrax. It also provides ACAM2000, a smallpox vaccine; CNJ-016 to address complications from smallpox vaccination; TEMBEXA for the treatment of smallpox disease caused by variola virus in adult and pediatric patients; BAT for the treatment of symptomatic botulism; Ebanga for the treatment of Ebola; Reactive Skin Decontamination Lotion Kit to remove or neutralize chemical warfare agents from the skin; Trobigard, a atropine sulfate obidoxime chloride auto-injector. In addition, the company is developing CGRD-001 for the treatment of poisoning by organophosphorus nerve agents or organophosphorus compounds; EBS-LASV to prevent Lassa fever; EBS-MARV to prevent Marburg virus disease; EBS-SUDV to prevent Sudan virus disease; Pan-Ebola mAbs for the treatment of ebola virus; SIAN Antidote for initial treatment of certain or suspected acute cyanide poisoning; UniFlu for immunity against influenza A and B viruses; and WEVEE-VLP for equine encephalitis virus infections. Further, it provides contract development and manufacturing services comprising drug substance and product manufacturing, and packaging, as well as technology transfer, process, and analytical development services. The company was incorporated in 1998 and is headquartered in Gaithersburg, Maryland.
Adjusted EBITDA grew 16% year-over-year to $77.6 million, with a margin improvement of 1,300 basis points to 35%
Net income increased 656% year-over-year to $68.0 million
NARCAN® sales fell 62%, a loss of $73.2 million, reflecting major headwinds in the Commercial Products segment
Total revenues declined 26% to $222.2 million, down from $300.4 million in Q1 2024
Emergent BioSolutions faces significant revenue concentration and demand volatility in government procurement-driven products, particularly within its Medical Countermeasures (MCM) portfolio, which are highly sensitive to contract timing and federal budget allocations
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 5.84 | 5.37 | 6.13 | 6.48 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Revenue Decline Despite Strong Profitability Metrics: Emergent BioSolutions Inc. reported total revenues of $222.2 million for the first quarter of 2025, representing a 26% decrease compared to $300.4 million in the same period last year. The decline was primarily driven by a significant drop in NARCAN® sales, which fell 62% year-over-year to $45.3 million. This was attributed to reduced sales of over-the-counter (OTC) and Canadian branded NARCAN®, largely due to an unfavorable price and volume mix. Revenues from Other Products also declined sharply by 95% to $2.3 million, driven by lower BAT® sales and the absence of RSDL® sales following its divestiture in 2024.
Net Income Surge and Margin Expansion: Despite the revenue contraction, the company achieved a substantial increase in profitability. Net income surged to $68.0 million in Q1 2025, a 656% increase from $9.0 million in the prior-year period. Gross margin improved from 45% to 50%, while adjusted gross margin expanded by 700 basis points to 58%. This performance was driven by a favorable sales mix weighted toward higher-margin products, particularly in the MCM segment, as well as ongoing cost reductions and efficiency gains.
Segment Performance Reflects Shift Toward MCM Portfolio: Segment analysis revealed that while Commercial Products revenue declined 62% year-over-year, MCM Products revenue remained relatively stable, increasing slightly by 1% to $156.6 million. Notably, Smallpox MCM sales more than doubled to $106.4 million due to increased sales of ACAM2000® and TEMBEXA®. In contrast, Anthrax MCM sales dropped 14%, and Other Products dropped 95%. The MCM segment demonstrated robust performance with a segment adjusted gross margin of 69%, up from 60% in Q1 2024.
Operational Efficiencies and Reduced Costs Drive Turnaround: Emergent significantly reduced its operating expenses, which totaled $172.3 million, down 34% from $260.6 million in Q1 2024. Cost of product and services sales declined 39%, while SG&A expenses were cut by 38% due to restructuring efforts and reductions in compensation, marketing, and professional services. Capital expenditures also dropped 67% to $3.6 million, reflecting a slowdown in facility development initiatives.
Business Development and Strategic Milestones: In Q1 2025, the company made notable strategic advances, including a $65 million supply agreement with the Ontario Ministry of Health for NARCAN® Nasal Spray and a $36.5 million sale of its Baltimore-Bayview facility. It also earned $50 million in milestone payments related to the sale of its Travel Health Business and secured additional MCM orders totaling approximately $27 million. Moreover, Emergent announced commercial rights to KLOXXADO® in North America and continued its collaboration with BARDA on Ebanga™, reinforcing its position in public health preparedness.
Outlook Reaffirmed for Full-Year 2025: The company reaffirmed its full-year 2025 guidance, maintaining a revenue range of $750 million to $850 million and increasing its net income forecast to $20–$70 million, up from $16–$66 million. Adjusted EBITDA is projected to be between $150 million and $200 million, with adjusted gross margin expectations in the range of 48% to 51%. Second-quarter revenues are forecasted between $95 million and $120 million, indicating a lighter quarter ahead but consistent with historical seasonality in the business.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Emergent BioSolutions Inc. (NYSE: EBS) at the closing market price of USD 5.84, as on May 12, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| EBS Emergent Biosolutions Inc |
-0.47 6.77% | 6.47 | - | 7.94 | 0.10 | 0.17 | 0.84 | -1.6519 |
| ZTS Zoetis Inc |
-1.5 0.92% | 162.15 | 40.18 | 30.96 | 10.67 | 17.60 | 11.27 | 26.18 |
| MKKGY Merck KGaA ADR |
0.24 0.91% | 26.69 | 21.25 | 14.93 | 3.10 | 2.14 | 3.60 | 12.98 |
| MKGAF MERCK Kommanditgesellschaft auf Aktien |
- -% | 136.20 | 21.73 | 14.95 | 3.16 | 2.15 | 3.56 | 12.82 |
| TAK Takeda Pharmaceutical Co Ltd ADR |
0.05 0.35% | 14.32 | 32.67 | 11.53 | 0.01 | 0.87 | 0.02 | 0.07 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 12,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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