BioMarin Pharmaceutical (BMRN)

Biotech company BioMarin Pharmaceutical (NASDAQ:BMRN) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 14.8% year on year to $745.1 million. The company expects the full year’s revenue to be around $3.15 billion, close to analysts’ estimates. Its non-GAAP profit of $1.13 per share was 18.6% above 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 $2.95 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 sales performance can indicate 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 10.3% 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.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. BioMarin Pharmaceutical’s annualized revenue growth of 16.5% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, BioMarin Pharmaceutical reported year-on-year revenue growth of 14.8%, and its $745.1 million of revenue exceeded Wall Street’s estimates by 1%.

Looking ahead, sell-side analysts expect revenue to grow 9.1% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is noteworthy and indicates the market is baking in 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 7.1% was weak for a healthcare business.

On the plus side, BioMarin Pharmaceutical’s operating margin rose by 27.3 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 17.4 percentage points on a two-year basis. These data points are very encouraging and shows momentum is on its side.

In Q1, BioMarin Pharmaceutical generated an operating profit margin of 30%, up 16.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

BioMarin Pharmaceutical’s EPS grew at an astounding 22.8% compounded annual growth rate over the last five years, higher than its 10.3% 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 expanded by 27.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q1, BioMarin Pharmaceutical reported EPS at $1.13, up from $0.70 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects BioMarin Pharmaceutical’s full-year EPS of $3.89 to grow 14.6%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

BioMarin Pharmaceutical has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 8.8% over the last five years, slightly better than the broader healthcare sector.

Taking a step back, we can see that BioMarin Pharmaceutical’s margin expanded by 14.9 percentage points during that time. This is encouraging because it gives the company more optionality.

BioMarin Pharmaceutical’s free cash flow clocked in at $157.6 million in Q1, equivalent to a 21.2% margin. This result was good as its margin was 17.9 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 1.4%, 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. Over the last few years, BioMarin Pharmaceutical’s ROIC has increased. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

Companies with more cash than debt have lower bankruptcy risk.

BioMarin Pharmaceutical is a profitable, well-capitalized company with $1.27 billion of cash and $595.7 million of debt on its balance sheet. This $676.7 million net cash position is 5.5% 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 enjoyed seeing BioMarin Pharmaceutical beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $63.21 immediately following the results.

Updated: July 10, 2025 at 11:25 PM EDT

Before deciding whether to buy BioMarin Pharmaceutical or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

BioMarin Pharmaceutical is a fine business. First off, its revenue growth was good over the last five years. And while its relatively low ROIC suggests management has struggled to find compelling investment opportunities, its rising cash profitability gives it more optionality. On top of that, its expanding adjusted operating margin shows the business has become more efficient.

BioMarin Pharmaceutical’s P/E ratio based on the next 12 months is 13.2x. Looking at the healthcare landscape right now, BioMarin Pharmaceutical trades at a pretty interesting price. For those confident in the business and its management team, this is a good time to invest.

Wall Street analysts have a consensus one-year price target of $95.52 on the company (compared to the current share price of $59.76), implying they see 59.8% upside in buying BioMarin Pharmaceutical in the short term.