What Is Going On With Regeneron Stock?

Regeneron Pharmaceuticals (REGN) stock currently trades at 17.6 times earnings. That represents a notable discount to the 21.5 multiple of the median S&P 500 company. The shares have lost 4.1% over the past six months, trailing the 15.7% return of the broader index. Over twelve months, however, the stock returned 27% against the index’s 17.1%. A valuation this low suggests investors are either overlooking a sound drug maker or pricing in underlying problems. So how healthy is the business you would be buying?

Regeneron’s Sales And Margins Look Healthy Today

Based on recent figures, the underlying operations appear robust. Regeneron’s revenue grew 9.3% over the last twelve months, outpacing the 8.3% growth of the median S&P 500 company. The company retained 26.9% of that revenue as operating profit, which sits well above the median company’s 18.5%. Over the last twelve months, Regeneron earned $4.3 billion of net income. This figure actually exceeded its $4.2 billion of operating income, indicating that part of the earnings behind its price-to-earnings multiple came from outside its operations.

The company’s biggest source of revenue is the money it earns from collaborations, which rose to $7.3 billion in fiscal 2025 from $6.1 billion the year before. Among those is the collaboration with Sanofi, which reports the sales of Dupixent.

The balance sheet provides further support. Regeneron ended the second quarter of 2026 with $15.1 billion of cash and marketable securities, net of debt. This liquidity compares favorably with a market value of $76.4 billion as of October 7, 2026. Based on these figures alone, investors might expect the stock to trade at a premium to the median company rather than a discount.

Why Might Investors Pay Less For Regeneron?

The discounted valuation likely reflects a steady erosion in profitability over recent years. Regeneron reported an operating margin of 35% three years ago, which narrowed to 30% two years ago. This metric fell again to 28% a year ago and dropped to 26.9% in the latest twelve months. The latest margin now sits below the 28.2% average of the last three years. Sales, by contrast, are growing faster than their three-year average of 7.0%.

The most glaring vulnerability in the business is EYLEA. Regeneron’s revenue from the drug fell to $2.7 billion in fiscal 2025 from $4.8 billion in fiscal 2024. The pressure continued into the second quarter of 2026, when U.S. sales of EYLEA were down 45% from a year earlier. During a July 30, 2026 call, management noted that the drop came mainly from patients moving to EYLEA HD and from competition. The company also expects more competition, mainly from the launch of several biosimilar versions of EYLEA. Management expects demand for the drug to keep falling each quarter through the second half of 2026. The current stock price appears to assume that EYLEA will keep shrinking and that Regeneron’s margin will continue slipping.

Regeneron Is Moving Patients To EYLEA HD

Regeneron’s strategic response to this decline is EYLEA HD, and so far that drug is growing fast. U.S. sales of EYLEA HD reached $596 million in the second quarter of 2026, up 52% from a year earlier. EYLEA HD now makes up about 60% of U.S. sales across the two drugs, against 34% a year earlier.

The Sanofi collaboration may help improve the outlook as well. Regeneron has finished repaying a development balance it owed Sanofi. Previously, these repayments had lowered its reported Sanofi collaboration revenue by about $530 million in the first half of 2026. On the July 30 call, management indicated it expected that revenue to step up from the third quarter, which has ended with results still pending.

Buying the stock at today’s price requires more than just betting that investors have overlooked a healthy company. The real calculation is that Regeneron can replace the sales EYLEA is losing and stop its margin from falling further. Management forecast that EYLEA HD demand would rise in the low to mid-teens from the second quarter of 2026 to the third. A third-quarter 2026 report showing that rise would mean the first part of the bet is on track.

Does This Mean You Should Act On REGN?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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