Long-Term Investment Advice: Corcept Therapeutics Shines Bright

Corcept Therapeutics is making waves in the booming U.S. biotech scene, with its stock surging 46.2% over the past six months. The company, known for its Cushing’s syndrome drug, Korlym, reported a staggering 39.1% year-over-year sales increase, reaching $310.6 million in H1 2024. With a market cap of $4.42 billion, Corcept is actively developing new treatments like Relacorilant, which shows promise in clinical trials.

Despite a high PE ratio of 35.3x compared to the industry average of 19x, its strong revenue growth and commitment to R&D position it as a solid investment opportunity in the fast-growing biotech market projected to reach $1,786 billionย byย 2033.

โ—‰ The US Biotech Industry Outlook

The biotech boom in the U.S. is hotter than a California summer! Fueled by groundbreaking tech and government cheerleading, the industry is soaring higher than a SpaceX rocket. According to Vision Research Reports, the market is projected to soar by 12.4% CAGR from 2024 to 2033. This rapid expansion is driven by advancements in areas like genomics, gene editing, and personalized medicine, positioning the U.S. as a global leader in healthcare innovation.

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U.S. Biotech Market Size 2023 to 2033
  • The US biotechnology market size was valued at $552.43 billion in 2023 and is anticipated to hit around $1,786 billion by 2033.
  • Key players like Abbvie Inc., Genentech Inc., and Amgen Inc. are leading the market.

Acknowledging the remarkable expansion of the biotech sector, we are taking a closer look at a stock that is showing considerable strength in its technical chart, complemented by robust financial performance.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Company OVERVIEW

Corcept Therapeutics is a biopharmaceutical company dedicated to developing innovative treatments for severe endocrine, oncologic, and metabolic disorders. Their lead product, Korlym, is approved for Cushing’s syndrome, a rare endocrine condition. Corcept is also advancing several pipeline candidates, including relacorilant for Cushing’s syndrome, treatments for various cancers, and potential therapies for neurological conditions like amyotrophic lateral sclerosis and nonalcoholic steatohepatitis. Founded in 1998, Corcept is based in Menlo Park, California.

โ— Significant Stock Performance of Corcept Therapeutics

Corcept Therapeutics Incorporated’s stock price has risen 46.2% in the past six months, despite a 2% industry decline. This surge is attributed to strong demand for Korlym, the company’s sole marketed drug used to treat Cushing’s syndrome, a condition that is primarily cured with mifepristone.

โ— The Economic Impact of Korlym

The primary source of revenue for Corcept emanates from the sales of Korlym. The drug has showcased remarkable growth, evidenced by a 39.1% year-over-year sales increase, culminating in $310.6 million during the first half of 2024. This growth is attributed to robust demand and an unprecedented number of patients being prescribed the medication.

โ— Corcept's Stock Growth Factors

  • Potential of Relacorilant: Positive GRACE study results suggest relacorilant could be a valuable treatment for Cushing’s syndrome, potentially driving revenue growth.
  • Pipeline Diversification: Corcept’s ongoing exploration of relacorilant in GRADIENT study demonstrates commitment to expanding pipeline.
  • Regulatory Progress: Successful completion of GRACE study positions Corcept for a new drug application in late 2024.
  • Market Need: Successful relacorilant could fill significant unmet medical need for Cushing’s syndrome.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - STOCK RECOMMENDATION

Idea BUY
Buy Range 38 – 40
Target 55 – 58
StopLoss* below X5
Duration 12-14 Months
Potential Returns 35% – 40%
Idea Buy Range Target StopLoss* Duration Potential Returns
BUY 38 – 40 55 – 58 below X5 12-14 Months 35% – 40%

* Once the first target hit, reset the StopLoss at your buying price.

Our recommendations are authentic and transparent. Find this recommendation posted in Tradingview. Be assured such records are permanent and irreversible.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Peer Companies

PEERS COMPARISON
Corcept Therapeutics (NASDAQ:CORT) - Peer Companies
  • Prestige Consumer Healthcare (NYSE: PBH) – $3.644 B
  • Jazz Pharmaceuticals (NASDAQ: JAZZ) – $6.766 B
  • Amphastar Pharmaceuticals (NASDAQ: AMPH) – $2.423 B
  • Organon (NYSE: OGN) – $5.142 B

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - TECHNICAL ANALYSIS

CORT-TECHNICAL ANALYSIS
Corcept Therapeutics (NASDAQ:CORT) - Technical Analysis

Monthly

  • The historical chart shows that the stock price is trending upward, marked by a sequence of higher highs and higher lows.
  • Having recently moved out of the parallel channel, the price is set for additional gains.

Daily

  • After an extended period of consolidation, the stock price has formed an Inverted Head & Shoulders pattern.
  • Post-breakout, the stock has stabilized above the breakout point and is now striving for new highs.
  • A surge in trading volume suggests that buyers are currently showing significant interest.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - RELATIVE STRENGTH

CORT-RELATIVE STRENGTH

Relative Performance - Last 1 Year

CORT —     US Smallcap 2000 —

  • The chart distinctly demonstrates that $CORT has significantly surpassed the US Smallcap 2000 index, attaining an impressive annual return of 30%, marking a remarkable accomplishment.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Revenue & Profit Analysis

โ— Year-on-year

PnL YoY
Corcept Therapeutics (NASDAQ:CORT) - Revenue & Profit Analysis - Year-on-year
  • In the fiscal year 2023, revenue experienced a significant increase of 20.4%, amounting to $482.4 million, compared to $401.9 million in fiscal year 2022.
  • However, EBITDA faced a downturn, decreasing to $108.3 million in FY23 from $113.9 million in FY22.
  • The EBITDA margin also saw a reduction, falling to 22.46% from 28.34% in FY22.
  • Moreover, diluted earnings per share (EPS) rose by 8% year-over-year, climbing to $0.94 in FY23, up from $0.87 in FY22.

**While the growth in EBITDA might raise some concerns, it’s crucial to acknowledge that the company is heavily investing in its research and development sector, and this investment has seen substantial increases over the years.

โ— Quarter-on-quarter

Corcept Therapeutics (NASDAQ:CORT) - Revenue & Profit Analysis - Quarter-on-quarter
  • In the most recent June quarter, the company reached an impressive achievement, with quarterly sales hitting a record high of $163.8 million. This represents a 12% increase from the $146.8 million reported in the March quarter and a substantial 39% growth compared to $117.7 million in the corresponding quarter of the previous year.
  • Additionally, EBITDA rose from $29.6 million to $36.2 million during the latest quarter.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Valuation

โ— P/E RATIO

Current P/E Ratio vs. Median P/E Ratio

  • Corcept Therapeutics sustained a median price-to-earnings ratio of 19.7x from December 2019 to 2023.
  • Presently, with a price-to-earnings ratio of 35.3x, the stock seems to be relatively expensive.

Current P/E vs. Peer Average P/E

Corcept Therapeutics (NASDAQ:CORT) - Current P/E vs. Peer Average P/E
  • CORT’s Price-To-Earnings Ratio stands at 35.3x, making it quite pricey when compared to the average of its peers, which is only 13.6x.

Current P/E vs. Industry Average P/E

PE vs INDUSTRY PE
Corcept Therapeutics (NASDAQ:CORT) - Current P/E vs. Industry Average P/E
  • CORT’s valuation seems high, as it has a Price-To-Earnings Ratio of 35.3x, which is considerably above the US Pharmaceuticals industry average of 19x.

โ— P/B Ratio

Current P/B vs. Peer Average P/B

PB vs PEERS PB
Corcept Therapeutics (NASDAQ:CORT) - Current P/B vs. Peer Average P/B
  • The current price-to-book (P/B) ratio suggests that the stock is slightly undervalued, sitting at 7.4x compared to the peer average of 10.8x.
  • However, it’s important to note that a P/B ratio of 7.4x is typically seen as significantly overvalued.

Current P/B vs. Industry Average P/B

PB vs INDUSTRY PB
Corcept Therapeutics (NASDAQ:CORT) - Current P/B vs. Industry Average P/B
  • When we analyze the P/B ratio against the industry standard, CORT stands out as being notably overvalued, with its P/B ratio of 7.4x far exceeding the industry average of just 1.7x.

โ— PEG Ratio

  • The stock currently seems to present a compelling investment opportunity, featuring a PEG ratio of 0.84.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Cash Flow Analysis

Corcept Therapeutics (NASDAQ:CORT) - Cash Flow Analysis
  • In FY23, operating cash flow increased to $127 million, compared to $120.3 million in FY22. However, it’s essential to recognize that when examining the overall trend from FY19 to FY23, there has been a decline in cash flow from operations.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Debt Analysis

Corcept Therapeutics (NASDAQ:CORT) - Debt Analysis
  • CORT operates without any debt, showcasing the robust financial health of the company.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - Top Shareholders

TOP SHAREHOLDERS
Corcept Therapeutics (NASDAQ:CORT) - Top Shareholders
  • Blackrock presently possesses a significant 15.8% ownership in this stock, while The Vanguard Group maintains approximately 9.1% stakes.

โ—‰ Conclusion

Following a comprehensive examination of technical and fundamental metrics, our assessment indicates that Corcept Therapeutics possesses substantial growth potential within the US biotechnology sector. Notwithstanding elevated valuations, the company’s increasing research and development expenditures demonstrate a strong commitment to its future prospects. Consequently, we consider Corcept Therapeutics a prudent investment choice at this juncture.

โ—‰ Corcept Therapeutics (NASDAQ:CORT) - TRADINGVIEW POSITION UPDATE

MONEY MANAGEMENT AND TRADING RULES

1)ย  Itโ€™s advisable to enter/exit in the recommended range.
2)ย  Strictly follow the StopLoss as mentioned. Honour it.
3) ย Use trailing StopLoss to retain profits.
4)ย  Diversify trading capital into our other trading recommendations.
5)ย  Risk only the money what you can afford to lose. Hedge accordingly.

Advisor / ANALYST SUMMARY

The stock trading advice is prepared by the Naranj Capital team under the guidance ofย Arijit Banerjee, CMT, CFTe. Arijit is a veteran trader and an active investor having in-depth knowledge of financial market research, advanced technical analysis, market cycle, algorithmic trading, and portfolio management. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the global authority of Technical Analysis and also has been honored as aย Certified Financial Technician (CFTe)ย by the International Federation of Technical Analysts, USA.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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