Is This the Most Undervalued Biotech Stock You Can Buy Right Now?

Biogen Inc (BIIB) currently trades at $140.32 per share, and looks like one of the most undervalued stocks in the biotech landscape right now. BIIB has one of the lowest price/earnings (P/E) ratios among its peers at 8.58x (compared to industry averages of 15-24x), along with a price-to-sales ratio at 2.14x (also significantly lower than peers).

But is BIIB stock a good investment right now - or just cheap? Here’s a closer look.

Putting Biogen’s Valuation in Perspective

The stock's attractive P/E ratio and reasonable P/S ratio suggest potential undervaluation, but these metrics should be weighed against a strong technical "Sell" signal for BIIB, with a 100% bearish consensus across medium and long-term indicators. 

Technical analysis reveals BIIB trading below all major moving averages, with particularly concerning positions under its 100-day ($159.12) and 200-day ($187.12) moving averages, confirming a sustained downtrend. 

The technical deterioration in Biogen stock mirrors the biotech’s declining revenue trajectory, with a drop from $10.17 billion in 2022 to $9.68 billion in 2024.

Additionally, BIIB sports a relatively high price/earnings-to-growth (PEG) ratio of 2.56, with analysts’ consensus estimates projecting only modest 1.2% earnings growth from $15.78 per share in 2025 to $15.97 in 2026.

Can BIIB Stock Bounce Back?

While revenue has been declining, Biogen does have a few potential catalysts to help fuel future growth. Notably, in a significant strategic expansion, Biogen recently partnered with Stoke Therapeutics to develop zorevunersen, a groundbreaking treatment for Dravet syndrome. 

The collaboration, secured through a substantial upfront payment of $165 million, grants Biogen exclusive commercialization rights outside North America, with potential milestone payments reaching $385 million plus tiered royalties. This partnership targets approximately 38,000 patients with Dravet syndrome across major markets, representing a significant opportunity in the rare disease space.

The Phase 3 EMPEROR study of zorevunersen, scheduled to commence in Q2 2025, marks a crucial milestone in Biogen's pipeline development, with pivotal data expected in the latter half of 2027. This not only strengthens Biogen's late-stage pipeline in rare diseases but also leverages their global expertise in commercializing high-value, disease-modifying medicines. 

The deal structure, including the option to license rights to future SCN1A-targeting products outside North America, demonstrates Biogen's commitment to expanding its neurology portfolio while maintaining its position as a leader in rare genetic disease treatments.

Wall Street Moderates Its Bullish Stance on BIIB

Analysts expect quarterly earnings to improve through 2025, with estimates of $3.59 per share for Q1 2025 rising to $4.11 for Q2 2025, potentially providing some support for the stock. Overall, Wall Street maintains a bullish stance on BIIB, with an average rating of "Moderate Buy." 

While Biogen maintains healthy profitability metrics with a 16.87% profit margin and 14.98% return on equity, it's worth noting that analyst sentiment has slightly declined over the past three months, suggesting growing caution among market experts. The number of “Strong Buy” ratings on BIIB currently stands at 15, down from 19 three months ago.

What’s the Bottom Line on BIIB Stock?

The convergence of weak technical indicators and declining fundamental metrics, despite apparently attractive valuation ratios and generally positive analyst sentiment, suggests investors should approach BIIB stock with caution right now. While the biotech stock may continue to face near-term pressure, there’s room for a recovery - making it a candidate for watchful consideration, rather than immediate action.