NovoCure (NVCR) reported strong Q2 results, beating both revenue and EPS estimates. The company saw good news on all fronts in the last few months – approval for Optune in mesothelioma (though it’s called NovoTTF-100L™ specifically for mesothelioma), Medicare reimbursement for newly diagnosed GBM and now, a strong quarter for Optune with a revenue beat and solid gross margin and net price per patient improvements.
I think NovoCure is fairly valued at current levels based on the low end of my valuation range (the range is $75 to $111 and based on Optune's approved indications and the late-stage pipeline, complete valuation available to subscribers), but I see room for additional upside in the following years (and to the high end of my valuation range in the medium-term) based on the company's continued solid execution and pipeline de-risking and expansion.
I added NovoCure to our Growth Stock Forum model portfolio in February 2018 and the stock delivered a 266% gain to date. I reduced position size on the way up at an average price of $68.7 (+218%) but NovoCure remains a top 10 holding in our model portfolio as of today.
New Money List = stocks that I already have a full position in but that I would have considered buying if I didn't have a full position.
Detailed coverage of NovoCure is available to Growth Stock Forum members and has included NovoCure as an exclusive investment idea in February 2018 and inclusions on the New Money List at opportunistic times (if a member joined later or didn't buy the stock initially).
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*Inception date March 7, 2016.
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Disclosure: I am/we are long NVCR.
Additional disclosure: This article reflects the author's personal opinion and should not be regarded as a buy or sell recommendation or investment advice in any way.