Why You Should Buy Collegium Pharmaceutical (COLL) at a Discount While You Still Can

If you’ve been keeping your ear to the ground these last couple of weeks, you might have noticed that pharma stocks really seem to be popping off lately. 

Whether you take a look at our Hot or Not lists, our Strong Buy stocks from top Wall Street analysts, or our weekly Stocks to Watch publication, there always seems to be a veritable flood of promising pharma stocks.

The sector is on a roll — but even so, with a little legwork, we can find tickers that are poised to outperform their peers.

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With that in mind, today we’ll be taking a look at Collegium Pharmaceutical (NASDAQ: COLL) — a $1.48 billion business with more than two decades of experience in the industry.

So, why has COLL caught our eye? 

Well, our in-house quant rating system, Zen Ratings, ranks Collegium Pharmaceutical shares quite highly. The system uses 115 unique factors to evaluate roughly 4,600 stocks every single day — and the top 5% of stocks, which are given a Zen Rating of A, have provided an average annual return of 32.52% looking back to the early 2000s.

Where exactly does COLL rank? It’s currently in the top 3% of stocks — and is rated 122nd overall out of 4,600.

Each Zen Rating consists of 7 Component Grade ratings. Looking at those can let us know what exactly COLL’s strengths are.

Let’s start with Growth — here, Collegium Pharmaceutical ranks in the 91st percentile — equivalent to or better than 91% of stocks, or, in other words, in the top 9%. The key driver here? Earnings are estimated to grow at a pretty nice pace at 32.15% per year.

Financials are another strong point — with enough cash flow to service debt and a larger war chest of short-term assets compared to its short-term liabilities, COLL is in the 89th percentile in terms of this Component Grade rating.

Then, we have our Artificial Intelligence Component Grade rating. We derive this from the findings of a neural network that is trained on more than two decades of market data, which is also constantly improving. The goal here is to leverage AI to suss out likely outperformers — and in this category, Collegium Pharmaceutical is in the top 20%.

But, far and away, the stock’s biggest strength is its valuation — and in particular, its valuation relative to growth prospects. COLL is trading at a price-to-earnings (P/E) ratio of 25.35x, at a time when the stock market average sits at 46.62x. In addition, Collegium Pharmaceutical’s price-to-earnings growth (PEG) ratio is a very attractive 0.79x. In terms of Value, the stock ranks at the very top — in the top 2%, to be precise.

COLL also stacks up well versus other stocks in the industry — the Pharmaceutical industry has an Industry Rating of B, and consists of 56 stocks — right now, this is the 8th highest-rated one.

Here’s the kicker — it might not remain undervalued for long. For one, Wall Street analysts have caught up. Since the start of the month, 3 stock market researchers have revisited their coverage — and their price targets, at $56 and $60, imply a 19.40% and 27.93% upside, respectively.

There’s another reason as to why you might want to pull the trigger on this one sooner rather than later. The company’s next earnings report is due in a little over a month — and seeing as it has outperformed estimates for 6 quarters straight, there’s good reason to believe that the streak will continue.

Last, but not least, we have positive developments on two fronts — one out in the open, the other behind closed doors. 

The first one is news coverage and positive catalysts. On January 8, Collegium published full-year 2026 guidance — and the company expects Jornay PM, an ADHD treatment, to pull in $190M to $200M in revenue for the full year. That same treatment is currently the subject of a slew of industry presentations as well.

The second front? Insider action. Most stocks see little to no insider buying, even when everything is going according to plan. In the past 12 months, 23.54% of the insider trades tied to COLL shares have been purchases — so there’s a strong hint of bullishness on the part of management and key personnel.

And so we come to the conclusion of today’s story. COLL has a solid growth trajectory, it’s quite undervalued, and has even dipped by 4.31% in the past 30 days. The fundamentals are there, and Wall Street has recognized the stock’s potential — all in all, it seems like a true blue no-brainer.

—> Click here to research COLL. If you’d like to find more high-quality pharma stocks, check out our Best Pharmaceutical Stocks screener

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