Gubra: Another quarter, another upgrade, and a new all-time high for the stock

Gubra upgraded their guidance yesterday regarding its contract research organization (CRO) service business following an impressive 51% organic revenue growth in the first quarter report of 2024 released today. Also, the adjusted EBIT-margin for the CRO business was 39%, significantly above average industry levels, illustrating the very strong momentum within the CRO business, which, to no surprise, was driven by a strong flow of obesity-related orders according to management. Based on this, the company upgraded the organic growth in revenue for 2024 to 15-20% (up from 10-15%) and its adjusted EBIT margin to 28-31% for the full year (up from 25-28%).

Investors have today once again sent Gubra shares soaring, clearly speculating that the raised guidance is just the first of more raises to come if the strong first quarter result reflects the current momentum in the CRO business as being more fundamentally based. Using traditional peer-group-based multiples to give valuation perspectives on Gubra’s CRO business, today’s stock price surge not only is a testament to the strength of Gubra’s CRO business, but also implicitly adds to increased confidence by the market of Gubra’s ability to successfully advance its pipeline of product candidates in its Discovery & Partnership segment. Especially within obesity projects – its own Amylin analog GUBamy and healthy weight loss product candidate UNC2 being two obvious examples as highlighted and thoroughly described by Gubra’s CEO Henrik Blou and CFO Kristian Borbos at today’s event with HCA Capital. At the event, management was also very confident that Gubra would continue to be able to attract strong applicants to grow their business, arguing that Novo Nordisk and other obesity-focused companies in Denmark together with Gubra actually creates a productive eco-system of obesity development that benefits all companies in hiring qualified medical development staff. Additionally, from a market opportunity perspective, management reiterated that there are plenty of opportunities to position different obesity product candidates, like the ones Gubra is developing, outside the fences of Novo Nordisk and other Big Pharma’s current obesity businesses. You can see the full event here: https://www.inderes.dk/videos/gubra-hvordan-er-2024-startet

Disclaimer: HC Andersen Capital receives payment from HC Andersen Capital for a DigitalIR/corporate visibility subscription agreement./ Henrik Ekman 16:02 -  07.05.2024