One-glance verdict
Undervalued
$54.92 our estimate vs market $34.69
Wall Street consensus: $39.14 (-28.7% lower than our fair-value estimate)
37% below our estimate, below the bear case
Fundamentals snapshot
Genmab A/S
GMAB · NMS · Healthcare · Biotechnology
Current price
$34.69
52-week range
$23.62 - $35.43
Market cap
$21.33B
Balance sheet
Watch
20.49x Strong cushion
Net debt $3.76B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 19.2% last year.
- Reward Returns 14.0% on equity, ahead of 20% of its peers.
- Risk Stock trades 9.3% above its 5-year average P/E.
- Risk Operating margin compressed from 43.2% to 35.2% over 3 years.
What this company does
Genmab A/S
Genmab is a biotechnology company that invents and develops medicines, primarily to treat different types of cancer. It makes most of its money from royalties (a cut of sales) on its successful treatments like DARZALEX, which are sold by larger partner drug companies. The company's future depends on the continued success of these partnerships and its ability to create new, effective drugs.
How the company got here
Genmab was founded in Copenhagen, Denmark, in 1999 as a spin-off from an American biotech company. A major turning point was its 2012 partnership with a Johnson & Johnson company to develop a cancer drug called daratumumab. The first approval of this drug in 2015, now named DARZALEX, was a huge success and transformed the company's finances by providing a steady stream of income. This success allowed Genmab to grow and begin developing and selling its own medicines more directly, marking a shift in its business strategy.
What it actually does
Genmab is a biotechnology company that creates specialized medicines to treat cancer and other serious illnesses. It focuses on antibody therapies, which are engineered versions of the proteins your immune system naturally uses to fight infections. Genmab designs these antibodies to find and attack specific targets, like cancer cells, with great precision. The company's scientific work has resulted in several approved medicines for diseases including types of blood cancer, cervical cancer, and multiple sclerosis.
Royalties from Partnerships
This is Genmab's largest and most established way of making money. The company invents and develops a new drug, and then partners with a large global pharmaceutical company who pays for and manages the worldwide marketing and sales. In return, Genmab receives a percentage of the sales, known as a royalty (a fee paid for the use of their invention). The biggest contributor to this income is the cancer drug DARZALEX, which is sold by a Johnson & Johnson company, but royalties from other drugs like Kesimpta for multiple sclerosis are also significant.
Product Sales and Collaborations
This is a newer and fast-growing part of Genmab's business where it takes a more hands-on role. Instead of just collecting royalties, Genmab is now directly involved in selling some of its own medicines, often in partnership with another company. Key drugs in this area include EPKINLY for a type of blood cancer and TIVDAK for cervical cancer. This approach allows Genmab to earn a larger share of a drug's revenue (the total money generated from sales) compared to a simple royalty agreement.
What management is betting on now
Genmab's main goal is to transition from primarily earning royalties to becoming a fully integrated company that discovers, develops, and sells its own medicines globally. To do this, the company is investing heavily in its pipeline (the group of new drugs it is currently developing) to ensure it has new products for the future. It is also building its own sales teams in key markets and making strategic acquisitions to gain new technologies, like antibody-drug conjugates (ADCs), which are designed to deliver potent drugs directly to cancer cells. The company is also exploring using artificial intelligence to make its research and development faster and more efficient.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $54.92 vs current price $34.69
Wall Street consensus is the average analyst price target: $39.14 (-28.7% lower than our fair-value estimate).
Our most-likely fair value is $54.92 a share — about 58.3% above today's price of $34.69, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $3.8B. Interest coverage 20.5x.
Net debt
$3.76B
Interest coverage
20.49x
Genmab A/S's profit covers its interest bill about 20.5 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
GMAB
BASELINE
Genmab A/S
Total debt $5.27B Interest coverage 20.49x This is the baseline the peer rows are being compared against.
Total debt $47.00M Interest coverage 258.36x +1,161% vs GMAB Carries about 12.6x more debt cushion than GMAB.
Total debt $362.46M Interest coverage -45.12x -100% vs GMAB This peer has almost no interest-payment cushion compared with GMAB.
Total debt $2.71B Interest coverage 84.52x +312% vs GMAB Carries about 4.1x more debt cushion than GMAB.
Total debt $38.27M Interest coverage 553.04x +2,599% vs GMAB Carries about 27.0x more debt cushion than GMAB.
What you should know
The case for and against GMAB
3 Rewards
3 Risks
Rewards
-
Revenue grew 19.2% last year.
-
Returns 14.0% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 9.3% above its 5-year average P/E.
-
Operating margin compressed from 43.2% to 35.2% over 3 years.
-
Insider ownership is only 0.0% (peer median: 2.0%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
27.53x
Forward P/E
21.82x
P/B
3.48x
P/S
5.16x
EV/EBITDA
17.77x
PEG ratio
4.36x
Profitability
How much profit each dollar creates
Gross margin
93.0%
Operating margin
35.2%
Net margin
19.1%
ROE
14.0%
ROA
8.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.89x
Current ratio
2.46x
Quick ratio
2.44x
Total debt
$5.27B
Total cash
$1.51B
Growth
How the business has been compounding
Revenue TTM
$4.13B
Revenue 5Y CAGR
21.2%
EPS TTM
1.26
EPS 5Y CAGR
8.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.19B
Free CF TTM
$1.13B
FCF margin
27.4%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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