2-Star Stocks Poised to Plunge: Incyte?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Incyte (NAS: INCY) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Incyte's business and see what CAPS investors are saying about the stock right now.

Incytefacts

Headquarters (founded)Wilmington, Del. (1991)
Market Cap$2.8 billion
IndustryBiotechnology
Trailing-12-Month Revenue$98.7 million
ManagementCEO Dr. Paul Friedman (since 2001)
CFO David Hastings (since 2003)
Return on Capital (average, past 3 years)(39.8%)
Cash/Debt$236.4 million / $322.2 million
CompetitorsAmgen
Celgene
Roche

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 12% of the 280 members who have rated Incyte believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, touched on Incyte's seemingly unsustainable valuation:

Jakafi revenue of [$21M] for Q1 was respectable but that number will like have to go much higher before Incyte will come close to neutralizing their hefty quarterly burn. Aside from preliminary data from the phase IIb trial of LY3009104 in rheumatoid arthritis, little is expected in the way of positive catalysts from the pipeline this year. The share price is now close to the peak seen after earnings were reported last month. ... Unfortunately, harsh reality must soon return both for Incyte and the broad markets.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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