Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


HALOZYME THERAPEUTICS INC

Nasdaq / Health Care / Biotechnology

Fundamental Rating

7

Taking everything into account, HALO scores 7 out of 10 in our fundamental rating. HALO was compared to 582 industry peers in the Biotechnology industry. Both the health and profitability get an excellent rating, making HALO a very profitable company, without any liquidiy or solvency issues. HALO is evaluated to be cheap and growing strongly. This does not happen too often! This makes HALO very considerable for value and growth and quality investing!



7

1. Profitability

1.1 Basic Checks

HALO had positive earnings in the past year.
In the past year HALO had a positive cash flow from operations.
Of the past 5 years HALO 4 years were profitable.
HALO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

HALO has a better Return On Assets (17.31%) than 98.45% of its industry peers.
HALO's Return On Equity of 179.30% is amongst the best of the industry. HALO outperforms 100.00% of its industry peers.
HALO has a Return On Invested Capital of 18.09%. This is amongst the best in the industry. HALO outperforms 97.93% of its industry peers.
HALO had an Average Return On Invested Capital over the past 3 years of 17.78%. This is above the industry average of 14.58%.
The 3 year average ROIC (17.78%) for HALO is below the current ROIC(18.09%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 17.31%
ROE 179.3%
ROIC 18.09%
ROA(3y)21.23%
ROA(5y)14.64%
ROE(3y)219.81%
ROE(5y)133.26%
ROIC(3y)17.78%
ROIC(5y)N/A

1.3 Margins

HALO has a better Profit Margin (36.95%) than 98.96% of its industry peers.
In the last couple of years the Profit Margin of HALO has declined.
HALO has a Operating Margin of 44.25%. This is amongst the best in the industry. HALO outperforms 99.48% of its industry peers.
In the last couple of years the Operating Margin of HALO has declined.
HALO has a Gross Margin of 78.51%. This is amongst the best in the industry. HALO outperforms 86.87% of its industry peers.
In the last couple of years the Gross Margin of HALO has declined.
Industry RankSector Rank
OM 44.25%
PM (TTM) 36.95%
GM 78.51%
OM growth 3Y-8.72%
OM growth 5YN/A
PM growth 3Y-11.05%
PM growth 5YN/A
GM growth 3Y-2.86%
GM growth 5Y-3.81%

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7

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HALO is creating value.
The number of shares outstanding for HALO has been reduced compared to 1 year ago.
HALO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HALO has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 3.80 indicates that HALO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.80, HALO is doing good in the industry, outperforming 76.68% of the companies in the same industry.
HALO has a debt to FCF ratio of 3.54. This is a good value and a sign of high solvency as HALO would need 3.54 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 3.54, HALO belongs to the best of the industry, outperforming 95.68% of the companies in the same industry.
HALO has a Debt/Equity ratio of 8.44. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 8.44, HALO is not doing good in the industry: 84.28% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 8.44
Debt/FCF 3.54
Altman-Z 3.8
ROIC/WACC2.45
WACC7.39%

2.3 Liquidity

HALO has a Current Ratio of 6.64. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
HALO has a better Current ratio (6.64) than 63.56% of its industry peers.
A Quick Ratio of 5.36 indicates that HALO has no problem at all paying its short term obligations.
HALO has a Quick ratio (5.36) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 6.64
Quick Ratio 5.36

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9

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 39.64% over the past year.
HALO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 45.64% yearly.
The Revenue has grown by 22.40% in the past year. This is a very strong growth!
The Revenue has been growing by 40.42% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)39.64%
EPS 3Y45.64%
EPS 5YN/A
EPS Q2Q%68.09%
Revenue 1Y (TTM)22.4%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Sales Q2Q%20.81%

3.2 Future

HALO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.93% yearly.
Based on estimates for the next years, HALO will show a quite strong growth in Revenue. The Revenue will grow by 13.80% on average per year.
EPS Next Y36.71%
EPS Next 2Y28.89%
EPS Next 3Y30.02%
EPS Next 5Y22.93%
Revenue Next Year14.05%
Revenue Next 2Y14.25%
Revenue Next 3Y16.48%
Revenue Next 5Y13.8%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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9

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 14.29 indicates a correct valuation of HALO.
97.58% of the companies in the same industry are more expensive than HALO, based on the Price/Earnings ratio.
HALO is valuated rather cheaply when we compare the Price/Earnings ratio to 28.05, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 9.59 indicates a reasonable valuation of HALO.
97.75% of the companies in the same industry are more expensive than HALO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HALO to the average of the S&P500 Index (20.07), we can say HALO is valued rather cheaply.
Industry RankSector Rank
PE 14.29
Fwd PE 9.59

4.2 Price Multiples

96.72% of the companies in the same industry are more expensive than HALO, based on the Enterprise Value to EBITDA ratio.
HALO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HALO is cheaper than 98.62% of the companies in the same industry.
Industry RankSector Rank
P/FCF 13.31
EV/EBITDA 13.67

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HALO has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HALO's earnings are expected to grow with 30.02% in the coming years.
PEG (NY)0.39
PEG (5Y)N/A
EPS Next 2Y28.89%
EPS Next 3Y30.02%

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0

5. Dividend

5.1 Amount

No dividends for HALO!.
Industry RankSector Rank
Dividend Yield N/A

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