Thursday - JMP Securities has reaffirmed its Market Outperform rating and a price target of $41.00 on Exelixis stock (NASDAQ:EXEL), aligning with the broader analyst consensus that sees upside potential. According to InvestingPro data, the stock appears undervalued at current levels, with analyst targets ranging from $23 to $42. The positive outlook follows a review of abstracts from the American Society of Clinical Oncology Gastrointestinal Cancers Symposium (ASCO GI), which provided insights into Exelixis' pipeline drug, zanzalintinib. This drug is seen as a key asset for the company's future growth beyond its current medication, cabozantinib.
Analysts at JMP Securities highlighted the promising efficacy of zanzalintinib, showcased in the Phase 1/2 STELLAR-001 study, which also has implications for the ongoing Phase 3 trial in metastatic colorectal cancer (mCRC), known as STELLAR-303. While the efficacy data has been encouraging, JMP Securities is awaiting further details on the drug's tolerability, which will be presented in upcoming posters.
Zanzalintinib, a next-generation tyrosine kinase inhibitor (TKI), is expected to bolster Exelixis' revenue following cabozantinib, with projected peak sales of $425 million, adjusted for probability. The company's financial health is rated as "GREAT" by InvestingPro, with impressive revenue growth of 17.3% over the last twelve months and a strong balance sheet showing more cash than debt. The drug's improved tolerability profile compared to cabozantinib could potentially allow patients to stay on treatment longer, leading to better health outcomes.
Exelixis is currently conducting six pivotal trials with zanzalintinib, targeting various cancers including colorectal, head and neck, and non-clear cell renal cell carcinoma (nccRCC). Outcomes from the first pivotal trials for these indications are anticipated in the second half of 2025 and into 2026.
In conclusion, JMP Securities remains optimistic about Exelixis' prospects, particularly with zanzalintinib's performance in clinical studies. The firm's maintained rating and price target reflect their confidence in the drug's potential to contribute significantly to the company's growth. With a robust gross profit margin of 96.2% and strong return on equity of 20%, the company's fundamentals support this positive outlook. For deeper insights into Exelixis' financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes 12 additional ProTips and detailed analysis.
In other recent news, Exelixis has been the subject of several significant financial updates. The company reported preliminary fourth-quarter sales from its Cabo franchise at approximately $509 million, contributing to full-year product sales around $1.805 billion. This figure marks an 11% year-over-year growth. For the fiscal year 2025, Exelixis has provided net product sales guidance in the range of $1.95 to $2.05 billion.
InvestingPro analysis indicates Exelixis maintains excellent liquidity with a current ratio of 3.93, positioning it well for continued growth. Noteworthy is the anticipated decision from the FDA regarding Cabo's label-expansion in neuroendocrine tumors (NETs), along with clinical readouts from the Zanza trials across various studies.
Meanwhile, several financial firms have updated their outlooks on Exelixis. Oppenheimer has raised the price target for Exelixis shares to $41.00, maintaining an Outperform rating. Truist Securities and Guggenheim have both maintained a Buy rating, with Truist raising the stock target to $42 due to promising sales prospects for its drug Cabometyx. Guggenheim also raised the price target to $42, showing optimism about the potential of Zanzalintinib, a late-stage pipeline asset. Brookline Capital Markets initiated coverage on Exelixis with a Buy rating and a price target of $40, foreseeing significant growth in sales of existing products and successful commercialization of new products. However, BMO Capital Markets and BofA Securities downgraded Exelixis due to a more balanced risk/reward scenario, despite raising their price targets.
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