Abstract
Ligand Pharmaceuticals will release its quarterly results on February 26, 2026 Pre-Market; this preview outlines an estimated $55.59 million in revenue (+42.45% year over year) and $1.56 EPS (+31.21% year over year), alongside business-mix dynamics, sequential comparisons, and what is most likely to move the stock around the print.Market Forecast
Consensus modeling for the current quarter points to revenue of $55.59 million, EPS of $1.56, and EBIT of $21.83 million, implying year-over-year growth of 42.45% for revenue, 31.21% for EPS, and 124.63% for EBIT. There are no formal margin forecasts in the dataset; thus, gross margin and net margin outlooks are not presented here.The prior quarter’s revenue mix indicates three pillars: collaborative R&D and other revenue at $58.20 million (about 50.41% of segment sales), royalties at $46.59 million (roughly 40.35%), and Captisol (sulfobutyl ether beta-cyclodextrin) at $10.67 million (about 9.24%). Within that mix, royalties remain the most promising lever for sustained compounding given their tie to commercial product sales; royalties contributed $46.59 million last quarter, and while formal segment-level year-over-year data is not provided, they continue to be positioned as the most scalable contribution within the revenue base.
Last Quarter Review
Ligand Pharmaceuticals’ latest reported quarter delivered $86.89 million of revenue (+67.71% year over year), a gross profit margin of 78.50%, GAAP net income attributable to common shareholders of $117.00 million, a net profit margin of 101.57%, and adjusted EPS of $3.09 (+67.94% year over year). EBIT expanded to $47.89 million, a year-over-year increase of 337.12%, highlighting a powerful swing-through of incremental revenue into operating profit.Business mix showed substantial contributions from collaborative R&D and other revenue ($58.20 million) and royalties ($46.59 million), with Captisol adding $10.67 million; this composition underpinned a high gross margin profile and helped deliver significant operating leverage. The outsize GAAP net margin suggests the quarter likely benefited from non-recurring or non-operating items on top of a strong core performance, which can make sequential comparisons noisier than year-over-year views and highlights the importance of focusing on recurring drivers within royalties and technology-related revenue lines.
Current Quarter Outlook (with major analytical insights)
Main business: Royalties and collaborative revenue set the tone
Royalties and collaborative revenue remain the principal lenses for thinking about this quarter’s print. With revenue projected at $55.59 million and year-over-year growth modeled at 42.45%, the structure of the top line implies continued uplift from royalty-bearing products and program-related payments, even as the sequential comparison should normalize off the elevated prior-quarter base of $86.89 million. The expected EPS of $1.56 (+31.21% year over year) and EBIT of $21.83 million (+124.63% year over year) tell a consistent story of scale, where incremental revenue continues to push through to profits, albeit at a lower absolute level than the previous quarter.From a modeling standpoint, royalties typically translate partner product sales into a high-margin income stream, which can cushion variability in other lines. Collaborative and other revenue, by contrast, may reflect milestone triggers, contract services, and program support that can be lumpy by nature. In combination, these lines usually yield a favorable blended margin profile over time, and last quarter’s 78.50% gross margin provides a backdrop for thinking about quality of revenue in the current period, even though no formal gross-margin forecast is available. Investors should, therefore, expect the quarter’s narrative to revolve around the breadth of royalty contributors, the cadence of collaboration deliverables, and how that mix informs earnings power at the modeled $21.83 million EBIT level.
Sequentially, the forecasted top line implies a normalization after an unusually high quarter that also featured a 101.57% GAAP net margin. A key analytical task is to separate recurring earnings power (royalty and technology-driven revenues) from non-recurring items that inflated the prior quarter’s bottom line. If reported results trend close to the $55.59 million revenue and $1.56 EPS estimates, the investment debate will likely focus on whether this marks a midpoint in a multi-quarter growth arc or a conservative waypoint ahead of further step-ups from new or expanding royalty streams.
Most promising business: Royalty engine and how it can compound
Among the company’s reported segments, royalties stand out as the most promising compounding engine. Last quarter, royalties contributed $46.59 million—nearly as large as the collaborative line and substantially larger than Captisol—and are forecast to underpin a 42.45% year-over-year revenue expansion this quarter. The economic logic is straightforward: as partner products grow, royalty income typically scales with minimal incremental cost, which can preserve or even improve margins when volumes rise.Within this framework, the near-term upside path relies on the breadth and health of underlying royalty streams. Any indication of partner demand stabilization, additional geographic penetration, or expanded indications for partnered medicines could color the trajectory of royalty receipts beyond this quarter’s print. Even without disclosing product-level detail here, the business math favors the royalty line as the segment most capable of delivering durable growth and aggregated cash flows that can subsequently be redeployed into additional assets or royalty acquisitions. The projected 124.63% year-over-year growth in EBIT suggests that, when royalties are a larger share of the mix, operating leverage can accelerate materially, which is consistent with the high-margin profile that royalties typically carry.
Investors will scrutinize management’s commentary on the breadth of royalty streams contributing to the current quarter and the expected cadence over the upcoming quarters. Evidence that diverse royalties are ramping in concert tends to derisk the forward profile relative to dependence on a smaller number of contributors. Should management reaffirm a robust forward cadence, it would support the view that the current revenue and EPS estimates are either fair or conservative, depending on the extent to which upcoming milestones or seasonality are embedded in the outlook.
Key stock-price drivers this quarter: Mix normalization, margin quality, and earnings translation
The most immediate stock-price variable around the print is likely to be the transition from last quarter’s elevated net income to this quarter’s more normalized earnings run-rate. Last quarter’s 101.57% net margin suggests non-operating or non-recurring items played a material role, which complicates sequential comparisons. Investors will focus on how much of the expected $1.56 EPS reflects the royalty run-rate and core operations versus items that do not repeat quarter to quarter; clarity here should shape the market’s perception of sustainable EPS power.Revenue mix will matter. If royalties comprise a larger share of this quarter’s $55.59 million estimate, the market may infer higher quality of earnings even in the face of sequential revenue decline, given superior drop-through characteristics. Conversely, if collaborative revenue or other lumpy items carry the quarter, consensus may discount the trajectory until a steadier royalty expansion is evident in reported numbers. The gross margin print, though not formally forecasted, will be an important read-through; a margin profile consistent with last quarter’s 78.50% would signal the underlying revenue mix remains favorable and capital-light, while a marked deviation would prompt investors to re-examine revenue composition and near-term variability.
Another focus is EBIT translation relative to revenue. The modeled $21.83 million EBIT (+124.63% year over year) against $55.59 million revenue implies sustained operating leverage if achieved. A result in line with that EBIT estimate would reinforce the market’s comfort with the company’s ability to convert incremental revenue into earnings, even as revenue normalizes sequentially. On the other hand, EBIT materially below that level would raise questions on spend timing, revenue composition, or the presence of one-time items in either period that skew comparability. Guidance commentary—especially any qualitative color on the anticipated cadence of royalties and contracted revenue—will likely determine whether investors extrapolate this quarter’s run-rate into their multi-quarter models.
Analyst Opinions
Within the January 1, 2026 to February 19, 2026 window, there has been limited publication of new, detailed sell-side previews explicitly handicapping this quarter’s revenue and EPS trajectory. In the absence of fresh, formal institutional previews during this period, the market has largely anchored on the company-centered metrics summarized above, which point to revenue growth of 42.45% year over year, $1.56 in EPS, and a reversion to operating levels more consistent with recurring business lines rather than the prior quarter’s net margin spike.Where public commentary has converged, the tilt is constructive rather than bearish, aligning with the directional growth implied by the current-quarter estimates and the profitability signals from the prior quarter. This skew rests on three practical considerations that frame how institutions typically interpret the setup: the royalty base remains the most credible vector for compounding earnings; the gross margin foundation last quarter was consistent with a capital-light model that can absorb lumpiness in collaborative revenue; and EBIT growth modeled at 124.63% year over year suggests operating leverage is set to remain favorable if the mix is as anticipated. Given the absence of newly published, detailed previews in the specified timeframe, the dominant stance in available commentary leans positive on the sustainability of top-line and profit growth, with debate concentrated on sequential normalization versus the magnitude and durability of royalty-led expansion.
In practical terms for the upcoming report, investors tracking institutional narratives will weigh three qualitative signposts. First, whether reported revenue lands near $55.59 million with a healthy contribution from royalties, thereby reinforcing the quality of earnings narrative. Second, whether EPS of $1.56 or better is achieved with clean operating dynamics, which would validate the implied drop-through from revenue to EBIT and bolster confidence in forward estimates. Third, whether management’s qualitative discussion indicates that royalty streams are broadening and that collaborative deliverables remain on track, which together would signal that growth is not solely contingent on one or two catalysts. The extent to which these points are addressed will likely set the tone of post-report institutional commentary and drive near-term price discovery.
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