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SIGA Technologies Inc

Recommendation: Buy

Entry Date Symbol Recommendation Entry Price (USD) Target 1 (USD) Target 2 (USD) Holding Duration Potential Upside
26 Jun, 24 SIGA Buy USD 7.37 USD 8.0 USD 8.76 16 days 18.9%

Fundamentals

  • Previous Close 5.91
  • Market Cap538.40M
  • Volume32077
  • P/E Ratio6.88
  • Dividend Yield-%
  • EBITDA97.55M
  • Revenue TTM157.02M
  • Revenue Per Share TTM2.21
  • Gross Profit TTM 77.82M
  • Diluted EPS TTM1.10

Data Powered by EOD Historical Data (“EODHD”).

Company Overview

SIGA Technologies, Inc., a commercial-stage pharmaceutical company, focuses on the health security related markets in the United States. Its lead product is TPOXX, an oral formulation antiviral drug for the treatment of human smallpox disease caused by variola virus. The company was incorporated in 1995 and is headquartered in New York, New York.

Key Positives

Debt-Free Balance Sheet

Higher Shareholders return: ROE of 5.7% in Q1FY24 vs. industry median of negative 0.1%

Key Negatives

Decreased short-term Liquidity: Current ratio of 3.05x in Q1FY24 vs. 9.34x in Q1FY23.

Decreased Free cash flow generation: FCF of negative USD 6.12mn in Q1FY24 vs. USD 24.45mn in Q1FY23.

Key Investment Risks

Clinical Development Risks, Dependency on Government Contracts & Regulatory Challenges

Recommendation Summary

Technical Summary

Entry Price Support* Target 1 Target 2
7.37 6.5 8.0 8.76

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.

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Key Reasons for Buy

 

 

  • Recent Developments: On April 11, 2024, SIGA Technologies' partner in Japan, Japan Biotechno Pharma, filed a new drug application for tecovirimat (TPOXX) in Japan for treating smallpox, mpox, cowpox, and complications from the vaccinia virus. Additionally, on April 1, 2024, SIGA announced an amendment to its international promotion agreement with Meridian Medical Technologies, LLC. Effective June 1, 2024, SIGA will lead international promotion activities for oral TPOXX®, while maintaining its relationship with Meridian to ensure continuity for key customer relationships. This amendment grants SIGA greater control over international promotion activities, enabling the company to better meet global customer needs amid orthopox threats.
  • Product Deliveries and Sales: In the first quarter of 2024, SIGA delivered approximately USD 24 million worth of oral TPOXX to various customers. This included USD 16 million delivered to the U.S. government, with USD 15 million going to the U.S. Strategic National Stockpile and USD 1 million to the U.S. Department of Defense. Additionally, USD 8 million of oral TPOXX was delivered to eight international customers. This highlights SIGA's broad customer base and significant contributions to public health preparedness both domestically and internationally.
  • Capital Management Activity: On March 12, 2024, SIGA's Board of Directors declared a special cash dividend of USD 0.60 per share, which was subsequently paid on April 11, 2024. This move reflects the company's strong financial position and its commitment to returning value to shareholders.
  • Financial Performance and Corporate Update: SIGA reported robust financial results for the quarter ended March 31, 2024, with product sales of USD 23.9 million and pre-tax operating income of USD 11.3 million, both showing significant growth compared to the same quarter in 2023. The company generated total revenues of USD 25.4 million, up from USD 8.3 million in the first quarter of 2023. Operating income was USD 11.3 million, compared to a loss of USD 2.1 million in the prior year, and net income was USD 10.3 million, up from a loss of USD 0.9 million. The company remains committed to advancing its strategy, progressing clinical programs, negotiating contracts with the U.S. Government, and promoting public health.

Technical Summary

 Price Performance: 

  • • SIGA's share price has given a return of 11.41% in the past three months. On the other hand, in the long term, the stock has corrected by 43.07% over the past six months. 
  • • The stock is leaning towards the lower band of its 52-week high of USD 10.83 and 52-week low price of USD 4.22, with the current price broken above an important resistance area of USD 7.00, therefore an expectation of upward movement if the levels sustain.
  • • The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 49.76, upward trending and recovering from oversold zone, with expectations of upward movement.

Considering the decent fundamentals, higher shareholders return, associated risks, higher topline financials and profitability metrics, and current valuation, a "Buy" recommendation is given on the stock at the closing market price of USD 7.37, as of June 25, 2024.

 

Key Financials in Pictures

Income Statement

Balance Sheet

Change in Cash

Total Operating Cash

Dividends Paid

Data Powered by EOD Historical Data (“EODHD”).

Peer Comparison

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)
SIGA
SIGA Technologies Inc
-0.13 2.20% 5.78 6.88 7.47 4.48 3.18 3.41 5.66
ZTS
Zoetis Inc
-1.315 0.80% 163.53 40.18 30.96 10.67 17.60 11.27 26.18
MKKGY
Merck KGaA ADR
0.12 0.42% 28.69 21.25 14.93 3.10 2.14 3.60 12.98
MKGAF
MERCK Kommanditgesellschaft auf Aktien
1.25 0.88% 143.30 21.73 14.95 3.16 2.15 3.56 12.82
TAK
Takeda Pharmaceutical Co Ltd ADR
-0.02 0.15% 13.08 32.67 11.53 0.01 0.87 0.02 0.07

Data Powered by EOD Historical Data (“EODHD”).

Disclosures:

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

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 June 25, 2024. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Note 4: The report publishing date is as per the Pacific Time Zone. 

Technical Indicators Defined: - 

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. 

 Resistance: 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. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices. 

 

Technical Indicators Defined: -

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.

Disclaimer :
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