Collegium Pharmaceutical’s (NASDAQ:COLL) Q4 Sales Top Estimates, Stock Jumps 14.1%

February 27, 2025 at 16:28 PM EST

COLL Cover Image

Pharmaceutical company Collegium Pharmaceutical (NASDAQ: COLL) reported Q4 CY2024 results topping the market’s revenue expectations, with sales up 21.5% year on year to $181.9 million. The company expects the full year’s revenue to be around $742.5 million, close to analysts’ estimates. Its non-GAAP profit of $1.77 per share was 15.1% above analysts’ consensus estimates.

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Collegium Pharmaceutical (COLL) Q4 CY2024 Highlights:

Revenue: $181.9 million vs analyst estimates of $180.2 million (21.5% year-on-year growth, 1% beat)
Adjusted EPS: $1.77 vs analyst estimates of $1.54 (15.1% beat)
Adjusted EBITDA: $107.7 million vs analyst estimates of $105.2 million (59.2% margin, 2.3% beat)
Management’s revenue guidance for the upcoming financial year 2025 is $742.5 million at the midpoint, in line with analyst expectations and implying 17.6% growth (vs 11.3% in FY2024)
EBITDA guidance for the upcoming financial year 2025 is $442.5 million at the midpoint, above analyst estimates of $439 million
Operating Margin: 20.9%, down from 41.2% in the same quarter last year
Market Capitalization: $914.3 million

“2024 was a year of strong execution for Collegium, marked by robust performance in our pain portfolio and the addition of Jornay PM, establishing our presence in neuropsychiatry and reaffirming our commitment to helping improve the lives of people living with serious medical conditions. This was made possible thanks to the dedication of our talented team,” said Vikram Karnani, President and Chief Executive Officer.

Company Overview

Founded in 2002, Collegium Pharmaceutical (NASDAQ: COLL) develops products for managing chronic pain, emphasizing abuse-deterrent formulations.

Branded Pharmaceuticals

The branded pharmaceutical industry relies on a high-cost, high-reward business model, driven by substantial investments in research and development to create innovative, patent-protected drugs. Successful products can generate significant revenue streams over their patent life, and the larger a roster of drugs, the stronger a moat a company enjoys. However, the business model is inherently risky, with high failure rates during clinical trials, lengthy regulatory approval processes, and intense competition from generic and biosimilar manufacturers once patents expire. These challenges, combined with scrutiny over drug pricing, create a complex operating environment. Looking ahead, the industry is positioned for tailwinds from advancements in precision medicine, increasing adoption of AI to enhance drug development efficiency, and growing global demand for treatments addressing chronic and rare diseases. However, headwinds include heightened regulatory scrutiny, pricing pressures from governments and insurers, and the looming patent cliffs for key blockbuster drugs. Patent cliffs bring about competition from generics, forcing branded pharmaceutical companies back to the drawing board to find the next big thing.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Over the last five years, Collegium Pharmaceutical grew its sales at a solid 16.3% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Collegium Pharmaceutical Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Collegium Pharmaceutical’s annualized revenue growth of 16.7% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. Collegium Pharmaceutical Year-On-Year Revenue Growth

This quarter, Collegium Pharmaceutical reported robust year-on-year revenue growth of 21.5%, and its $181.9 million of revenue topped Wall Street estimates by 1%.

Looking ahead, sell-side analysts expect revenue to grow 17.4% over the next 12 months, similar to its two-year rate. This projection is healthy and indicates the market is baking in success for its products and services.

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Operating Margin

Collegium Pharmaceutical has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average operating margin of 19.7%.

Looking at the trend in its profitability, Collegium Pharmaceutical’s operating margin rose by 8.8 percentage points over the last five years, as its sales growth gave it operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 19.7 percentage points on a two-year basis.

Collegium Pharmaceutical Trailing 12-Month Operating Margin (GAAP)

In Q4, Collegium Pharmaceutical generated an operating profit margin of 20.9%, down 20.2 percentage points year on year. This contraction shows it was recently less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Collegium Pharmaceutical’s EPS grew at an astounding 93.1% compounded annual growth rate over the last five years, higher than its 16.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Collegium Pharmaceutical Trailing 12-Month EPS (Non-GAAP)

Diving into the nuances of Collegium Pharmaceutical’s earnings can give us a better understanding of its performance. As we mentioned earlier, Collegium Pharmaceutical’s operating margin declined this quarter but expanded by 8.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Collegium Pharmaceutical reported EPS at $1.77, up from $1.58 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Collegium Pharmaceutical’s full-year EPS of $6.38 to stay about the same.

Key Takeaways from Collegium Pharmaceutical’s Q4 Results

We enjoyed seeing Collegium Pharmaceutical beat analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also happy its full-year EBITDA guidance outperformed Wall Street’s estimates. Overall, this quarter had some key positives. The stock traded up 14.1% to $32.43 immediately following the results.

Collegium Pharmaceutical may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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