Argenx (ARGX) Stock Potential Underestimated Amid Market Worries

Argenx's (ARGX) stock price has declined due to investor concerns about a shift in Medicare patients from Part B to Part D, affecting the gross-to-net ratio. However, Wedbush analysts believe the current stock price does not reflect the company's promising core franchises in MG and CIDP, nor its development pipeline. They maintain an Outperform rating and a price target of $715, expecting the company to outperform the market for the remainder of the decade.

Argenx (ARGX) has recently seen a decline in its stock price following the company's first-quarter earnings report. The downturn is primarily attributed to investor concerns about a shift in Medicare patients from Part B to the more costly Part D, which is affecting the gross-to-net ratio [1].

Despite this, Wedbush analysts maintain an optimistic outlook on Argenx's future prospects. They believe the current stock price does not fully reflect the promising potential of the company's core franchises in Myasthenia Gravis (MG) and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), nor does it acknowledge the future prospects within its development pipeline [1].

Wedbush analysts have elevated Argenx to its Best Ideas List, emphasizing the company's strong potential for sustained growth in the autoimmune sector [2]. The firm maintains an Outperform rating for Argenx, setting a price target of $715 for its shares, expecting the company to outperform the market for the remainder of the decade [1].

Analysts forecast an average target price of $747.91 for Argenx, with a high estimate of $1,065.00 and a low estimate of $416.00 [1]. The average target implies an upside of 30.07% from the current price of $574.99. The consensus brokerage recommendation is currently 1.5, indicating a "Buy" status [1].

GuruFocus estimates the estimated GF Value for Argenx in one year to be $1938.21, suggesting an upside of 237.09% from the current price of $574.99 [1].

Argenx reported a total operating income of $807 million for Q1 2025, reflecting a 99% growth in product net sales compared to the prior year [1]. The company successfully launched a pre-filled syringe for VYVGART in the US and Germany, enhancing patient access and convenience [1]. Argenx maintained a strong gross margin of 90% in Q1 2025, consistent with previous quarters [1].

The company is on track to progress four INDs in the clinic this year, with ARGX-109 and ARGX-213 now in Phase 1 studies [1]. Argenx has a robust cash balance of $3.6 billion at the end of Q1 2025, driven primarily by cash flow from operations [1].

Argenx anticipates increased gross to net over time due to the shift to Part D, which could affect revenues despite patient volume growth [1]. The company is experiencing some technical difficulties with the transition of patients from Part B to Part D, impacting net pricing [1].

References:
[1] https://www.gurufocus.com/news/2902184/argenx-argx-stock-shows-undervalued-potential-amid-market-concerns-argx-stock-news
[2] https://www.gurufocus.com/news/2892560/argenx-argx-secures-spot-on-wedbushs-best-ideas-list-argx-stock-news