Is a good buy lxrx now ?
7/20/2024 03:38am
**Lexicon Pharmaceuticals (LXRX) does not appear to be a strong buy at this time.** Here's why:
1. **Financial Performance Concerns**: Lexicon Pharmaceuticals has a negative earnings per share (EPS) of $0.82, which indicates that the company is currently unprofitable. Additionally, the company's revenue growth rate is projected to be significantly high at 5,430.90%, which could be unrealistic and may not be sustainable.
2. **Stock Price and Analyst Ratings**: The average 12-month price target for LXRX is $8, with a high estimate of $10 and a low of $4. The current stock price is $2.13, suggesting a potential upside. However, the stock has a high beta of 1.60, indicating that it is more volatile than the market. Analyst ratings are mixed, with a strong buy rating from one analyst and buy ratings from the others. This mixed sentiment could lead to uncertainty among investors.
3. **Market Sentiment**: The stock has experienced a significant increase of 29.09% in the last 6 months, which could be seen as a positive sign. However, the stock's performance in the past 3 months has been volatile, with a high average true range (ATR) of $0.130. This volatility could continue, making it difficult to predict future performance.
4. **Regulatory and Sales Challenges**: Lexicon does not intend to pursue any regulatory approvals of sotagliflozin in T2D, which could limit the potential market for this drug. Furthermore, the sales of Inpefa (sotagliflozin) were below estimates, which could impact the company's revenue and investor confidence.
In conclusion, while there is potential for growth based on the current stock price and analyst price targets, the mixed financial performance indicators, high volatility, and regulatory challenges suggest that LXRX may not be a good buy at this time. Investors should exercise caution and consider their risk tolerance before making investment decisions.