Amgen Inc. (AMGN): Among the Best Undervalued Stocks to Invest In Now

Amgen Inc. (AMGN) has long been a favorite among biotech investors, thanks to its robust pipeline and strong financial performance. However, the company's stock price has recently lagged behind its peers, presenting an opportunity for value-oriented investors. With a compelling valuation, a strong pipeline, and a track record of growth, Amgen is poised to deliver significant returns in the coming years.

Undervalued Valuation Metrics

Amgen's valuation metrics indicate that the stock is undervalued compared to its peers in the biotech sector. The company's P/E ratio of 25.62x is lower than the average P/E ratio of 27.08x for its peers, such as AbbVie Inc. (ABBV) and Roche Holding AG (ROG). Additionally, Amgen's EV/EBITDA ratio of 11.43x is lower than the average EV/EBITDA ratio of 14.21x for its peers, suggesting that Amgen's valuation is more attractive based on its earnings power. Furthermore, Amgen's EV/Sales ratio of 5.9x is lower than the average EV/Sales ratio of 6.89x for its peers, indicating that Amgen's valuation is more favorable based on its sales performance. Lastly, Amgen's FCF Yield of 6.33% is higher than the average FCF Yield of 3.24% for its peers, and its Dividend Yield of 2.97% is higher than the average Dividend Yield of 3.17% for its peers, suggesting that Amgen offers a more attractive return on investment and income stream compared to its peers.

Strong Pipeline and Clinical Trial Success

Amgen's pipeline of innovative therapies and recent clinical trial results support its long-term growth prospects. The company has a robust pipeline with a focus on areas of high unmet medical need, including several late-stage trials and early-in-lifecycle medicines that have shown promising results. Amgen has over a dozen significant pipeline milestones planned for 2024, indicating a strong pipeline of potential new therapies. Additionally, the company has recently reported positive results from several clinical trials, such as the Phase 3 WAYPOINT trial for TEZSPIRE® (tezepelumab-ekko), which showed rapid and sustained effects in chronic rhinosinusitis with nasal polyps, nearly eliminating the need for surgery. Furthermore, Amgen has started a Phase 3 trial for MariTide, an experimental weight loss drug, which could expand the company's portfolio into the booming obesity drug market.

Diversified Therapeutic Areas and Investment in R&D

Amgen's pipeline spans four therapeutic areas, including cardiovascular disease, oncology, neuroscience, and bone health. This diversification reduces risk and provides multiple avenues for growth. The company's recent focus on rare diseases has also opened up new opportunities for growth in this underserved market. Amgen continues to invest heavily in research and development, allocating significant resources to its pipeline. This commitment to innovation ensures a steady stream of new therapies to drive long-term growth.

Conclusion

Amgen Inc. (AMGN) is an undervalued biotech stock with a strong pipeline, a track record of growth, and a compelling valuation. The company's valuation metrics indicate that it is undervalued compared to its peers, and its pipeline of innovative therapies and recent clinical trial results support its long-term growth prospects. With a diversified therapeutic focus and a commitment to investment in R&D, Amgen is well-positioned to deliver significant returns in the coming years. Investors seeking undervalued biotech stocks should consider adding Amgen to their portfolios.