IONIS PHARMACEUTICALS INC (IONS) Stock Analysis
IONIS PHARMACEUTICALS INC (IONS) Stock Analysis
Overall Grade: F (Concerning)
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IONIS PHARMACEUTICALS INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -17.2% | Below expectations |
| FCF Margin | -34.5% | Cash flow pressure |
| Debt/Equity | 3.6x | Elevated debt |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is IONIS PHARMACEUTICALS INC's Profitability and ROIC?
IONIS PHARMACEUTICALS INC's return on invested capital of -17.2% is below the typical cost of capital. Gross margin of 98.3% with operating margin at -40.4% reflects the company's strong market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -17.2% | Red flag | Below cost of capital |
| Return on Equity (ROE) | -67.2% | Red flag | Moderate equity returns |
| Gross Margin | 98.3% | Excellent | Strong pricing power |
| Operating Margin | -40.4% | Warning | Moderate operational efficiency |
How Strong is IONIS PHARMACEUTICALS INC's Cash Flow Quality?
IONIS PHARMACEUTICALS INC generated $-325.7M in free cash flow over the trailing twelve months, representing a -34.5% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | -34.5% | Red flag | Thin cash margins |
| Free Cash Flow (TTM) | $-325.7M | Red flag | Cash burn |
| OCF/Net Income | 0.7x | Adequate | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is IONIS PHARMACEUTICALS INC's Financial Health?
IONIS PHARMACEUTICALS INC maintains a net cash position of $917.3M, providing significant financial flexibility.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 3.6x | Red flag | Elevated leverage |
| Net Cash Position | $917.3M | Excellent | Net cash positive |
Is IONIS PHARMACEUTICALS INC Stock Overvalued or Undervalued?
IONIS PHARMACEUTICALS INC trades at a P/E of -33.5x, representing a premium to the sector median of N/A. Free cash flow yield of -2.6% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -33.5x | Red flag | Reasonable valuation |
| EV/Sales | 11.4x | Warning | Growth premium priced in |
| FCF Yield | -2.6% | Warning | Lower cash yield |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -17.2% | Bottom 50% | - |
| Free Cash Flow Margin | -34.5% | Bottom 10% | - |
| Gross Margin | 98.3% | Top 25% | 1.6x above |
| Operating Margin | -40.4% | Top 50% | -9.0x below |
| Return on Equity (ROE) | -67.2% | Bottom 50% | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -17.2% (Red flag - Bottom 50% of sector (median: 0.0%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: -34.5% (Red flag)
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 98.3% (Excellent - Top 25% of sector (median: 61.4%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 359.9% (Red flag)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: -2.6% (Red flag)
Frequently Asked Questions
Q: What is IONIS PHARMACEUTICALS INC's Return on Invested Capital (ROIC)?
IONIS PHARMACEUTICALS INC (IONS) has a trailing twelve-month Return on Invested Capital (ROIC) of -17.2%. This compares below the sector median of 0.0%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is IONIS PHARMACEUTICALS INC's Free Cash Flow Margin?
IONIS PHARMACEUTICALS INC (IONS) has a free cash flow margin of -34.5%, generating $-325.7 million in free cash flow over the trailing twelve months. Negative free cash flow means the company is consuming cash, which may require financing.
Q: Is IONIS PHARMACEUTICALS INC stock overvalued or undervalued?
IONIS PHARMACEUTICALS INC (IONS) trades at a P/E ratio of -33.5x, which is above the sector median of N/A. The EV/Sales multiple is 11.4x.
Q: How much debt does IONIS PHARMACEUTICALS INC have?
IONIS PHARMACEUTICALS INC (IONS) has a debt-to-equity ratio of 3.6x with total debt of $1.8 billion. Despite carrying debt, the company maintains a net cash position of $917.3 million.
Q: What is IONIS PHARMACEUTICALS INC's revenue and earnings growth?
IONIS PHARMACEUTICALS INC (IONS) grew revenue by 33.8% year-over-year. Earnings per share increased by 19.7% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does IONIS PHARMACEUTICALS INC compare to competitors in Healthcare?
Compared to other companies in Healthcare, IONIS PHARMACEUTICALS INC (IONS) shows: ROIC of -17.2% is below the sector median of 0.0% (Bottom 32%). FCF margin of -34.5% trails the sector median of 0.0%. Gross margin at 98.3% is 37 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Healthcare companies with available SEC filings.
Q: What warning signs should I watch for with IONIS PHARMACEUTICALS INC?
Investors in IONIS PHARMACEUTICALS INC (IONS) should monitor these potential warning signs: 1) FCF margin is thin at -34.5%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. 3) Debt-to-equity of 3.6x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-29. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.