Pharming Group N.V. ADS each representing 10 ordinary shares (PHAR)

FairStock Score: 48/100 — MIXED

Key Financials

Strengths

• Generates $69 million in annual free cash flow (5.7% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.42, providing financial flexibility
• Altman Z-Score of 229.1 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($1) with negative 2768% margin of safety—limited downside protection

AI Analysis

Pharming Group N.V. ADS each representing 10 ordinary shares is a micro-cap healthcare company valued at $1.2 billion. The business generates $376 million in annual revenue with a 1.4% net margin and $69 million in free cash flow. From a quality standpoint, Pharming shows Altman Z-Score of 229.1 confirms fortress-level solvency and modest 1% ROE. On valuation, the stock is commanding a steep 416.0x multiple, with trades far above its Graham Number ($1) with no margin of safety. Growth dynamics show revenue growing at 14.9% and profit growth of 82.8%. Our composite FairStock Score of 48/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $69 million in annual free cash flow (5.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 416x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer