Buy IONS Stock After Its 35% Pop?

Ionis Pharmaceuticals’ stock surged 35% on September 2, 2025, following positive late-stage clinical trial results for olezarsen, a treatment for severe hypertriglyceridemia (sHTG). The market’s enthusiasm centers on olezarsen’s estimated peak sales potential of $2.5 billion—a figure that dwarfs Ionis’ current twelve-month revenue of $944 million. The key question now is whether IONS stock remains a buy after this substantial rise. We believe it does, and will examine the supporting factors in the analysis below. That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Separately, see – Can Google Stock Unlock $1 Trillion After Antitrust Victory?

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Financial Performance Reveals Mixed Signals

Revenue Trends Show Decline with Recent Uptick

Ionis faces a declining revenue trajectory over the medium term, with a 1.4% average annual decline over three years compared to 5.3% growth for the S&P 500. The last twelve months show a steeper 7.6% drop to $717 million. However, the most recent quarter delivered 10.1% growth to $132 million, suggesting potential momentum.

Profitability Remains Severely Challenged

The company’s operational metrics paint a concerning picture:

• Operating margin: -65.9% (vs. 18.6% for S&P 500)
• Operating cash flow margin: -70.0% (vs. 20.2% for S&P 500)
• Net income margin: -63.9% (vs. 12.7% for S&P 500)

Balance Sheet Provides Financial Cushion

Despite operational losses, Ionis maintains strong financial stability:

• Debt-to-equity ratio: 15.2% (vs. 20.5% for S&P 500)
• Cash-to-assets ratio: 76.3% (vs. 7.2% for S&P 500)
• $2.1 billion in cash provides substantial runway for operations and development

Valuation Reflects High Expectations

At a price-to-sales ratio of 12.9x versus 3.3x for the S&P 500, IONS trades at a significant premium that assumes successful pipeline execution and substantial future revenue growth.

Pipeline Potential Over Current Performance

The investment case for IONS fundamentally shifts from financial metrics to pipeline potential. Olezarsen’s approval could transform the company’s revenue profile, potentially justifying current valuations through growth rather than compression of multiples.

Key considerations:

• Revenue acceleration: Successful olezarsen commercialization could increase revenues by multiples
• Valuation dynamics: While P/S ratios may compress over time, revenue growth could drive net positive stock performance
• Long-term horizon required: The investment thesis depends on 3-5 year execution rather than near-term financial improvements

Risk Assessment

Significant downside risks accompany the opportunity:

• Historical volatility: IONS has previously experienced 40-60% declines during market stress
• Regulatory uncertainty: Clinical trial success doesn’t guarantee FDA approval

Overall, IONS presents a high-risk, high-reward opportunity for investors with appropriate risk tolerance and investment horizon. The recent 35% surge reflects genuine pipeline potential, but investors must accept substantial volatility and potential significant losses. The stock’s appeal lies not in its current financial performance—which remains poor—but in the transformative potential of its drug pipeline, particularly olezarsen’s opportunity.

See, there always remains a meaningful risk when investing in a single, or just a handful, of stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

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