Collegium Pharmaceutical: Undervalued Following Q2 Results and Upgraded Revenue Guidance

Collegium Pharmaceutical (COLL) has reported Q2 earnings with declining net income and EPS, but raised full-year revenue guidance and highlighted progress on its buyback program. Shares have surged 24% in the past month and 33% in the past three months. The stock is considered undervalued by analysts, with a consensus price target above the current share price. The company's differentiated pain portfolio and regulatory trends favoring safer opioid options may enhance market share and pricing power, while patent expirations and rising operating costs could challenge the outlook.

Collegium Pharmaceutical (COLL) reported its Q2 2025 earnings, showing a mixed bag of results. While the company exceeded analysts' expectations in terms of revenue and earnings per share (EPS), net income and EPS declined year-over-year. Despite this, the company raised its full-year revenue guidance and highlighted progress in its buyback program. Shares have surged 24% in the past month and 33% in the past three months, with analysts considering the stock undervalued.

Revenue and EPS Highlights
Collegium's Q2 2025 GAAP revenue was $188.0 million, a 29% year-over-year increase, surpassing analysts' estimates by $7.1 million [1]. The non-GAAP EPS hit $1.68, up 3.7% from the prior year, also beating expectations [1].

Key Challenges
GAAP net income fell to $12.0 million from $19.6 million in Q2 2024, reflecting higher operating expenses and other costs. Adjusted operating expenses more than doubled year-over-year, reaching $61.9 million [1].

Outlook and Guidance
The company raised its full-year 2025 product revenue guidance to $745 million to $760 million and adjusted EBITDA guidance to $440 million to $455 million [1]. This reflects increased confidence in product uptake, particularly for its ADHD treatment, Jornay PM.

Buyback Program
Collegium completed a $25 million share repurchase in July and authorized a new $150 million buyback program scheduled to run through December 2026 [1].

Analyst Sentiment
The stock has surged 24% in the past month and 33% in the past three months, with analysts considering the stock undervalued based on its Fair Value metrics [2].

Conclusion
Collegium Pharmaceutical's Q2 earnings report shows mixed signals, with revenue and EPS beating expectations but net income and EPS declining. The company's differentiated pain portfolio and regulatory trends favoring safer opioid options may enhance market share and pricing power. However, patent expirations and rising operating costs could challenge the outlook. Analysts remain optimistic, with a consensus price target above the current share price.

References
[1] https://www.aol.com/finance/collegium-coll-q2-revenue-jumps-145156140.html
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-collegium-pharmaceutical-beats-q2-2025-estimates-stock-surges-93CH-4203429