Noven Pharmaceuticals, Inc. (NOVN) is coming off of a great quarterly report in which revenues were up 29% and resulted in another earnings surprise.
Company Description
Noven develops and manufactures “transdermal” delivery systems, or in simple terms a patch that delivers medicine through the skin. The company’s products are used for attention deficit disorders and female hormone therapy. Noven also offers oral medication for other mental irregularities.
Revenue Up 29%
The company reported first-quarter results on May 7 that included revenue of $27.6 million, up 29% from the same quarter last year. Net income came in at $4.5 million, up from $2.6 million.
Earnings per share came in at 18 cents, nickel higher than the consensus estimate and 7 cents higher than last year. This is the company’s third surprise in the past 4 quarters.
Raising Guidance
In the same release Peter Brandt, president and CEO, said “In light of our first quarter performance and our expectations for gross margin and other aspects of our business, we are raising our guidance for 2009 earnings per share to $0.95 to $1.05 from our previous range of $0.85 to $0.95.”
Analysts raised their estimates to fall in the high end of the company’s view. The consensus for full-year 2009 is now $1.02, up from $0.88. Next year’s estimates are averaging $1.11, up from $0.97.
These projections would yield growth rates of 29% and 9%, respectively.
Solid Valuations
Share of NOVN continue to trade at a good value, despite the company’s recent success. The stock is priced at 13 times forward earnings and has a PEG ratio of 0.9.
The Chart
After a recent surge that sent the stock well above the 52-week high, it has lost a bit of momentum. However, this can be seen as a good entry point.
