BioMarin Pharmaceutical (BMRN)

Biotech company BioMarin Pharmaceutical (NASDAQ:BMRN) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 4.1% year on year to $776.1 million. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $3.18 billion at the midpoint. Its non-GAAP profit of $0.12 per share was 62.5% below analysts’ consensus estimates.

Company Overview

Pioneering treatments for conditions that often had no previous therapeutic options, BioMarin Pharmaceutical (NASDAQ:BMRN) develops and commercializes therapies that address the root causes of rare genetic disorders, particularly those affecting children.

Over the next few years, therapeutic companies, which develop a wide variety of treatments for diseases and disorders, face strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.

BioMarin's competitors in the rare disease space include Sanofi's Genzyme unit (NASDAQ: SNY), Ultragenyx Pharmaceutical (NASDAQ: RARE), Alexion (now part of AstraZeneca, NASDAQ: AZN), and Vertex Pharmaceuticals (NASDAQ: VRTX). In gene therapy for hemophilia, BioMarin competes with CSL Behring (ASX: CSL) and Pfizer (NYSE: PFE).

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With $3.09 billion in revenue over the past 12 months, BioMarin Pharmaceutical has decent scale. This is important as it gives the company more leverage in a heavily regulated, competitive environment that is complex and resource-intensive.

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, BioMarin Pharmaceutical’s sales grew at a decent 10.7% compounded annual growth rate over the last five years. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. BioMarin Pharmaceutical’s annualized revenue growth of 15.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, BioMarin Pharmaceutical grew its revenue by 4.1% year on year, and its $776.1 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 8.7% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and implies the market is forecasting success for its products and services.

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

BioMarin Pharmaceutical was profitable over the last five years but held back by its large cost base. Its average operating margin of 9.4% was weak for a healthcare business.

On the plus side, BioMarin Pharmaceutical’s operating margin rose by 23.2 percentage points over the last five years, as its sales growth gave it immense operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 14.2 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

In Q3, BioMarin Pharmaceutical generated an operating margin profit margin of negative 6%, down 21.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

BioMarin Pharmaceutical’s EPS grew at an astounding 16.3% compounded annual growth rate over the last five years, higher than its 10.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into BioMarin Pharmaceutical’s earnings to better understand the drivers of its performance. As we mentioned earlier, BioMarin Pharmaceutical’s operating margin declined this quarter but expanded by 23.2 percentage points over the last five years. Its share count also shrank by 2.9%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q3, BioMarin Pharmaceutical reported adjusted EPS of $0.12, down from $0.91 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects BioMarin Pharmaceutical’s full-year EPS of $3.61 to grow 31.5%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

BioMarin Pharmaceutical has shown impressive cash profitability, giving it the option to reinvest or return capital to investors. The company’s free cash flow margin averaged 11.9% over the last five years, better than the broader healthcare sector. The divergence from its underwhelming operating margin stems from the add-back of non-cash charges like depreciation and stock-based compensation. GAAP operating profit expenses these line items, but free cash flow does not.

Taking a step back, we can see that BioMarin Pharmaceutical’s margin expanded by 17 percentage points during that time. This is encouraging because it gives the company more optionality.

BioMarin Pharmaceutical’s free cash flow clocked in at $340.2 million in Q3, equivalent to a 43.8% margin. This result was good as its margin was 16.6 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although BioMarin Pharmaceutical has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 2.7%, lower than the typical cost of capital (how much it costs to raise money) for healthcare companies.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. BioMarin Pharmaceutical’s ROIC has increased over the last few years. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

BioMarin Pharmaceutical is a profitable, well-capitalized company with $1.48 billion of cash and $596.7 million of debt on its balance sheet. This $881.2 million net cash position is 8.4% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We struggled to find many positives in these results. Its full-year EPS guidance missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $52.67 immediately after reporting.

Updated: December 3, 2025 at 10:51 PM EST

Before investing in or passing on BioMarin Pharmaceutical, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

BioMarin Pharmaceutical is a fine business. To kick things off, its revenue growth was good over the last five years. And while its mediocre ROIC lags the market and is a headwind for its stock price, its rising cash profitability gives it more optionality. On top of that, its astounding EPS growth over the last five years shows its profits are trickling down to shareholders.

BioMarin Pharmaceutical’s P/E ratio based on the next 12 months is 11.2x. When scanning the healthcare space, BioMarin Pharmaceutical trades at a fair valuation. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $89.36 on the company (compared to the current share price of $53.72), implying they see 66.3% upside in buying BioMarin Pharmaceutical in the short term.