Halozyme Therapeutics: Still Undervalued Ahead Of Earnings

Halozyme Therapeutics (NASDAQ: HALO) has long been a contender in the biotechnology sector, leveraging its Enhanze drug delivery technology to enhance drug efficacy and patient outcomes. Despite recent volatility, the stock remains undervalued ahead of its upcoming earnings cycle, offering investors a compelling entry point. With projected financial metrics exceeding consensus estimates and a history of post-earnings price recovery, Halozyme’s valuation appears misaligned with its growth trajectory.

Key Earnings Dates and Historical Performance

Halozyme’s 2025 earnings schedule is critical to its valuation narrative. The next announced earnings release for Q1 2025 is set for May 6, 2025, after the market closes. This follows a Q4 2024 report on February 18, 2025, which saw shares dip -0.7% initially but rebound +6.3% over the subsequent 72 days. A similar pattern may emerge post-May 6 results, given the company’s tendency to outperform expectations.

The Q2 2025 earnings, projected for August 11, 2025, will further test investor confidence. Historical trends suggest strong performance: in Q2 2024, Halozyme reported EPS of $0.68, beating the $0.59 consensus, while revenue of $221.04 million exceeded forecasts by $19.13 million. Such outperformance has historically driven post-earnings gains, as seen in the Q4 2024 recovery.

Financial Projections Signal Undervaluation

Halozyme’s 2025 financial forecasts highlight a compelling growth story. Key metrics include:
- Q1 2025 EPS: $1.03 (vs. $0.83 in Q1 2024).
- Q2 2025 EPS: $1.29 (vs. $0.68 in Q2 2024).
- Full-Year EPS Guidance: $4.95–$5.35, implying a potential 43% increase over 2024’s $3.44 EPS.

At recent prices (~$61.42), Halozyme trades at a P/E ratio of ~12.1 based on the midpoint of its 2025 EPS guidance. This valuation is starkly undervalued compared to its peers in the biotechnology sector, which average a P/E of ~20–25.

Why the Undervaluation Persists—and Why It Won’t Last

Market skepticism likely stems from short-term macroeconomic concerns, including interest rate pressures and biotech sector volatility. However, Halozyme’s fundamentals counterbalance these risks:
1. Strong Revenue Growth: Q2 2025 revenue is projected at $246 million, up 6% YoY and aligning with its $1.2 billion annual revenue target.
2. Margin Expansion: EBITDA margins are expected to widen to ~75% in 2025, supported by cost efficiencies and the scalability of its Enhanze platform.
3. Pipeline Momentum: Partnerships with Roche, Eli Lilly, and others underscore the commercial viability of its drug delivery technology, reducing reliance on any single product.

Catalysts Ahead of the May 6 Earnings

Investors should watch for three key catalysts ahead of the May 6 release:
1. Top-Line Growth: Revenue must surpass the Q1 2024 figure of $231 million to validate momentum.
2. Margin Guidance: Any upward revision to 2025 EBITDA or EPS targets could trigger a valuation rerating.
3. Pipeline Updates: Positive news on collaborations or new therapeutic applications of Enhanze could amplify investor confidence.

Conclusion: A Compelling Buy at Current Levels

Halozyme’s valuation remains disconnected from its growth trajectory, offering a rare entry point in an otherwise frothy biotech landscape. With a P/E of ~12.1 versus sector averages, and earnings catalysts in May and August 2025, the stock is primed for a rebound. Historical data shows that post-earnings volatility often creates buying opportunities, particularly when results exceed muted expectations.

The company’s $1.2 billion revenue target and $5.35 EPS ceiling suggest a $300 million+ net income run rate by year-end—a level that justifies a valuation multiple closer to 15–18x. At current prices, HALO offers a ~30–40% upside potential by late 2025, assuming earnings meet or exceed guidance.

Investors should consider accumulating shares ahead of the May 6 earnings, with a focus on buying dips below $60. The August 11 Q2 results will further test the narrative, but Halozyme’s execution to date suggests it remains a top-tier play in the drug delivery space.

In short, Halozyme’s undervaluation is an anomaly in a sector brimming with high-flying names. With earnings catalysts on the horizon and a robust pipeline, this could be the year the market finally catches up.