115 Reasons to Snap Up Pacira Biosciences (PCRX) Shares

Every once in a while, a stock will pop up with an interesting set of scores per our rating system. Now, not all of them turn out to be great opportunities — but I do think I’ve come across one this time around.

Today, we’ll be taking a look at Pacira Biosciences (NASDAQ: PCRX) — a $1.05 billion market-cap company that’s in the business of non-opioid pain management and regenerative medicine.

First things first — our proprietary quant rating system, Zen Ratings, uses 115 unique factors to evaluate roughly 4,600 stocks each day. The top 5% of stocks are given a Zen Rating of A — and these equities have provided an average annual return of 32.52% since the early 2000s.

A note from our sponsors...

Right now, PCRX falls into that category, as it ranks in the 95th percentile of the stocks that we track.

But that’s not the ONLY reason why this stock is worth watching …

As great as that is, it is still a big-picture overview — and we need to look at details here. Each Zen Rating consists of 7 Component Grade ratings, which can give us more insight into what exactly makes Pacira shares interesting.

I’m going to do things a bit differently from how I usually do them here — we’ll start with the weaker ratings first. 

Despite only scoring a D for Sentiment, PCRX has Wall Street’s seal of approval — the average price target for the stock, currently pegged at $31, implies a very hefty 26.74% upside.

So, what gives? Well, in this particular case, there’s been plenty of short interest as of late. However, there’s no clear catalyst — and with a -7.73% dip over the past week already on the books, we’re more likely to see both a bounce in price and an improvement on the Sentiment front rather than extended losses — provided that the wider market doesn’t see a move to the downside.

What about Momentum? In the past 3 months, the price of PCRX has slipped by 0.49%. On the monthly chart, it’s gained just 1.62%.

That’s neither here nor there — but it is interesting in light of the fact that the company has beaten earnings estimates for 6 quarters in a row. The market obviously isn’t convinced yet — but we do have a solid track record of outperformance on our hands.

Now on to the good stuff. Pacira Biosciences is solid in terms of Financials and Safety — which is quite appealing in uncertain times such as these. When it comes to the former, it ranks in the top 6% — and with regard to the latter, it’s in the top 13%. Debt has shrunk over the past 5 years, the company’s debt-to-equity ratio stands at 0.78, margins are improving, and the stock’s beta stands at just 0.62.

We’ll get back to the Component Grade ratings in a minute — but it should also be noted that PCRX compares favorably to rivals and peers. It’s ranked 15th overall out of 56 stocks in the Pharmaceutical industry, which has an Industry Rating of A.

We’ve saved the best for last — and in this case, the best is PCRX’s unique strength in both Value and Growth. 

In terms of the Value Component Grade rating, the stock ranks in the 98th percentile — thanks chiefly to a price-to-earnings growth (PEG) ratio of 0.49x. When it comes to Growth, it ranks in the top 5%, on account of the fact that the company’s earnings are forecast to grow at an exceptional rate of 108.65% per year, versus the wider market’s 40.61% and the industry’s 51.37%.

Lastly, let’s take a minute to look at developments beyond the metrics. We have a pretty robust pipeline of treatments here — three in phase 3 trials, one in phase 2 trials, and four in phase 1 trials. 

Last year, the company released positive news regarding both a novel gene therapy for Osteoarthritis as well as a cold therapy treatment for pain alleviation — and while it’s still too early to draw a definitive conclusion, the signs are positive.

The balance sheet is great, the stock is quite stable, and there’s a solid track record of outperformance here. But it’s that combination of an appealing valuation and solid growth prospects that really stands out.

Pacira’s next earnings call isn’t that far away, and will be held in mid-February — so if you do end up adding it to your portfolio at the current discount, you might not have to wait all that long to reap the benefits.

—> Click here to research PCRX

What to Do Next?

• 77 Best Stocks NOW! >
• See All “A” Rated Stocks with +32.52% Average Annual Return >
• 2 New Stocks to Buy from Steve Reitmeister >

Want to get in touch? Email us at news@wallstreetzen.com.