Buy, Sell, Or Hold Alnylam Stock At $280?
ALNY Stock
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Alnylam Pharmaceuticals (NASDAQ:ALNY), a biotech company specializing in RNA interference therapeutics for genetically defined diseases, has experienced remarkable growth with its stock price surging from below $150 in March 2024 to over $280 currently, representing nearly a 100% increase.
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This impressive performance was largely driven by promising clinical trial results for its cardiovascular drug Amvuttra released in mid-2024. Today marks another significant milestone as the FDA has expanded Amvuttra's approval to include a broader patient population with a genetic heart condition, building upon its existing approval for treating protein accumulation in nerves. [1]
The expanded approval carries substantial revenue implications, with Amvuttra now projected to reach approximately $8 billion in peak sales—a dramatic increase considering Alnylam's total revenue was just $2 billion last year. In response to this development, the company's stock jumped more than 10% during trading on Friday, March 21.
Now that the stock has seen a large move, it looks relatively expensive - making it a expensive pick to buy at its current price of around $280. We believe there are some minor concerns with ALNY stock, which makes it relatively expensive given that its current valuation looks extremely high.
We arrive at our conclusion by comparing the current valuation of ALNY stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Alnylam Pharmaceuticals along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a strong operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
Going by what you pay per dollar of sales or profit, ALNY stock looks very expensive compared to the broader market.
• Alnylam Pharmaceuticals has a price-to-sales (P/S) ratio of 16 vs. a figure of 3.2 for the S&P 500
Alnylam Pharmaceuticals' Revenues have grown considerably over recent years.
• Alnylam Pharmaceuticals has seen its top line grow at an average rate of 40.7% over the last 3 years (vs. increase of 6.3% for S&P 500)
• Its revenues have grown 23.0% from $1.8 Bil to $2.2 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues grew 34.9% to $593 Mil in the most recent quarter from $440 Mil a year ago (vs. 5.0% improvement for S&P 500)
Alnylam Pharmaceuticals' profit margins are considerably worse than most companies in the Trefis coverage universe.
• Alnylam Pharmaceuticals' Operating Income over the last four quarters was $-177 Mil, which represents a very poor Operating Margin of -7.9% (vs. 13.0% for S&P 500)
• Alnylam Pharmaceuticals' Operating Cash Flow (OCF) over this period was $-8.3 Mil, pointing to a very poor OCF-to-Sales Ratio of -0.4% (vs. 15.7% for S&P 500)
Alnylam Pharmaceuticals' balance sheet looks very strong.
• Alnylam Pharmaceuticals' Debt figure was $1.3 Bil at the end of the most recent quarter, while its market capitalization is $37 Bil (as of 3/21/2025). This implies a very strong Debt-to-Equity Ratio of 4% (vs. 19% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $2.7 Bil of the $4.2 Bil in Total Assets for Alnylam Pharmaceuticals. This yields a very strong Cash-to-Assets Ratio of 63.5% (vs. 14.8% for S&P 500)
ALNY stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on ALNY stock? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
• ALNY stock fell 30.8% from a high of $173.91 on 3 January 2022 to $120.42 on 11 May 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 August 2022
• Since then, the stock has increased to a high of $300.55 on 16 October 2024 and currently trades at around $280
• ALNY stock fell 30.0% from a high of $133.12 on 20 February 2020 to $93.12 on 12 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 17 April 2020
• ALNY stock fell 58.6% from a high of $36.55 on 9 October 2007 to $15.14 on 9 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 July 2013
In summary, Alnylam Pharmaceuticals' performance across the parameters detailed above are as follows:
• Growth: Extremely Strong
• Profitability: Extremely Weak
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Strong
Despite Alnylam's current elevated valuation making the stock appear costly, which supports the assessment that ALNY represents an expensive investment opportunity, potential investors should consider the company's shifting trajectory.
After years focused primarily on drug development, Alnylam is now entering a phase where it can capitalize on these efforts. While the current valuation might seem steep at first glance, projected sales growth averaging approximately 25% annually over the next three years, coupled with potentially much stronger earnings growth, suggests the premium may be justified by the company's improving financial outlook.
Worried about the rich valuation of ALNY stock? As an alternative, consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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