Incyte Corp (NASDAQ:INCY) stock moved more than 10% in the last 5 trading days, while the S&P was up 3.7%. While the stock is overall up this year, it is still 10% below the year’s high. Its recent move, the analysis of our AI engine, and the fundamental trend suggest that upward momentum could sustain. Our AI engine analyzes past patterns in stock movements to predict near term behavior for a given level of movement in the recent period, and suggests nearly a 36% probability of Incyte moving up another 10% over the next 21 trading days. The probability of moving down by the same amount is slightly lower at 23%, making the stock 1.5x more likely to go up for this quantum of change. Over the next 3 months, the likelihood of a 10% upside move increases to 46%. Our detailed dashboard highlights the chances of Incyte’ stock rising or falling and should help you understand near-term return probabilities for different levels of movements.
Looking at the underlying fundamentals, it appears that Incyte is not just a near term game – but could be a good long-term opportunity as well. Our dashboard Big Movers: Incyte Moved 10.3% – What Next? lays this out.
At the beginning of this year, Incyte’s trailing 12 month P/S ratio was 8.69. This figure decreased -6.6% to 8.12, before ending at 8.95. So there is not much difference in terms of how expensive the stock looks from a multiples perspective. However, continuous improvement in the underlying financials suggests a buying opportunity. The market has continuously rewarded this growth and there is a good chance that the momentum will continue.
Incyte’s stock price increased 10.3% last week. In comparison, the stock has increased more than 53% between 2017 and now, implying that the recent move was inline with the long-term trend. And here is the reason why. Incyte’s revenue has increased 40% from $1,536 Mil in 2017 to $2,159 Mil in 2019, implying consistent and healthy growth. For the last 12 months, this figure stood at $2,388 Mil, suggesting an increase of 10.6% over 2019 numbers. This came at a time when most companies suffered. In addition, Incyte’s net margins have increased from -20.4% in 2017 to 20.7% in 2019. For the last 12 months, this figure plummeted to -8% but this decline can be attributed to a jump in R&D spending rather than an operational challenge.
Taking all perspectives together, it appears Incyte can be a good investment. But what if you’re looking for a more balanced portfolio instead? Here’s a high quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.