By Contributor,Pavlo Gonchar,Trefis Team

Copyright forbes

Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images
SOPA Images/LightRocket via Getty Images

Here’s why we believe Regeneron Pharmaceuticals (REGN) stock merits attention as a value addition. Currently, it is trading almost 44% lower than its 1-year peak and is also priced at a PS multiple below its average from the last 3 years. Nonetheless, it possesses solid fundamentals relative to its valuation.

Sound Revenue Growth: 5.4% LTM and 0.3% average over the last 3 years.

Cash Generative: Nearly 25.0% free cash flow margin and a 27.0% operating margin LTM.

No Significant Margin Shocks: Regeneron Pharmaceuticals has successfully avoided any significant margin collapses over the past 12 months.

Moderate Valuation: In spite of favorable fundamentals, REGN stock is trading at a PE ratio of 13.4.

Advantage Over S&P: When compared to the S&P, it offers lower valuation, greater LTM revenue growth, and superior margins.

To provide quick context, Regeneron Pharmaceuticals develops and provides innovative medicines worldwide, encompassing treatments for eye diseases, atopic dermatitis, asthma, and rheumatoid arthritis through its discovery, development, manufacturing, and commercialization processes.

While investing in a single stock can involve risks, there is significant value in the broader diversified strategy we implement with the Trefis High Quality Portfolio. Our approach extends beyond just equities. A balanced portfolio comprising 10% commodities, 10% gold, and 2% crypto alongside equities and bonds is likely to yield higher returns over the next 1-3 years while also offering better protection in case of a 20% market crash. We have analyzed the figures.

Comparison with benchmark median

But do these figures reveal the complete picture? Read Buy or Sell REGN Stock to determine whether Regeneron Pharmaceuticals still possesses an advantage that remains sustainable.

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Stocks Like These Can Outperform. Here Is The Data

Below are statistics for stocks with the same selection criteria applied from 12/31/2016 to 6/30/2025.

Average forward returns of 12.7% and 25.8% over 6-month and 12-month respectively.

Win rate (percentage of selections yielding positive returns) exceeding 70% for both 6-month and 12-month time frames.

Not overly reliant on market downturns. This strategy has achieved a 12-month average return approaching 20% with a 67% win rate, even during non-crash scenarios.

But Be Aware Of The Risk

That being said, REGN is not immune to significant declines. It dropped nearly 69% during the Dot-Com crash, around 58% during the Global Financial Crisis, and 48% throughout the 2018 correction. Even more recent events—the Covid pandemic and inflation surge—led to reductions of approximately 25-27%. This stock has strong fundamentals, but during market disruptions, losses can still be significant.

Yet, the risk isn’t confined to major market downturns. Stocks can decline even in favorable market conditions—consider situations like earnings announcements, business updates, or outlook adjustments. Read REGN Dip Buyer Analyses to learn how the stock has bounced back from sharp declines in the past.

The Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has consistently outperformed its benchmark, inclusive of the S&P 500, the S&P mid-cap, and the Russell 2000 indices. What accounts for that? As a group, HQ Portfolio stocks have delivered superior returns while minimizing risk compared to the benchmark index; they avoid wild fluctuations, as demonstrated by HQ Portfolio performance metrics.

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