On the four Ms, Biomarin Pharmaceutical Inc earns 60 for management and 84 for moat. The management score rests on a return on invested capital of 5.6% and a gross margin of 77.1% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.11x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 11.6% a year, below the 12.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 23.2x. That produces an intrinsic value of $6.71, a 10-CAP price of $39.67 and a payback time price of $53.67, with the value zone set at the highest of the three, $53.67. Today's price of $58.44 sits 9% above it.
A wonderful business at the wrong price is still the wrong price. Biomarin Pharmaceutical Inc scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $58.44 |
| Market cap | $11.3B |
| P/E ratio | 149.8x |
| Return on invested capital | 5.6% |
| Gross margin | 77.1% |
| Debt to equity | 0.11x |
| Free cash flow yield | 6.4% |
| Growth rate used | 11.6% |
| Growth rate measured | 12.0% |
| Exit multiple assumed | 23.2x |
| Company | Moat | Buy price |
| Bio-Techne (TECH) | 50 | $17.73 |
| Halozyme Therapeutics Inc (HALO) | 73 | $105.48 |
| Jazz Pharmaceuticals Plc (JAZZ) | 53 | $321.05 |
| Incyte (INCY) | 88 | $140.62 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Biomarin Pharmaceutical Inc rather than accepting ours.