What happened
Shares of the mid-cap biotech Jazz Pharmaceuticals (JAZZ 0.30%) were up by 12.2% as of 1:19 p.m. ET on Wednesday. The drugmaker's stock is up today in response to its better-than-expected 2021 fourth-quarter and full-year results.
What's the main impetus behind today's double-digit move higher? Jazz topping $3 billion in annual revenue for the first time in its history in 2021 is certainly noteworthy, but investors appear to be bidding up the shares more for the company's 2022 outlook.
Image source: Getty Images.
So what
Speaking to this point, Jazz said during its fourth-quarter report that annual sales could jump by another 12.3% to 18.8% in 2022. The company's top line is taking flight right now thanks to a spate of new growth products, such as the childhood epilepsy drug Epidiolex, the small cell lung cancer treatment Zepzelca, and the recently approved leukemia medication Rylaze.
What's important to understand is that Jazz's stock might be trading at a mere 2.5 times 2022 sales at current levels. That's a downright bargain for a high-growth pharmaceutical company, especially one with significant assets in the rare-disease space.
Now what
Is the stock a strong buy in the wake of these impressive financial results? Wall Street thinks that shares of this mid-cap drugmaker could rise by another 30.5% over the next 12 months. While investors should always take analyst price targets with a huge grain of salt, Jazz's stock does appear to be incredibly cheap at these levels.
In other words, this biotech stock does indeed comes across as a compelling value play.
