Ligand Pharmaceuticals Crushes Estimates

Ligand Pharmaceuticals (NAS: LGND) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Ligand Pharmaceuticals crushed expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share improved.

Gross margins dropped, operating margins grew, and net margins shrank.

Revenue details
Ligand Pharmaceuticals booked revenue of $12.9 million. The one analyst polled by S&P Capital IQ expected revenue of $8.2 million. Sales were much higher than the prior-year quarter's $3.9 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.24. The one earnings estimate compiled by S&P Capital IQ anticipated $0.02 per share. GAAP EPS of $0.24 for Q4 were 4.3% higher than the prior-year quarter's $0.23 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 84.1%, 23,560 basis points worse than the prior-year quarter. Operating margin was 35.3%, 10,330 basis points better than the prior-year quarter. Net margin was 37.2%, 7,710 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.3 million. On the bottom line, the average EPS estimate is $0.01.

Next year's average estimate for revenue is $30.7 million. The average EPS estimate is -$0.09.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 162 members out of 179 rating the stock outperform, and 17 members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 46 give Ligand Pharmaceuticals a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ligand Pharmaceuticals is buy, with an average price target of $24.00.

Over the decades, small-cap stocks like Ligand Pharmaceuticals have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story