NASDAQ:ALKS is showing good growth, while it is not too expensive.

Last update: Sep 26, 2023

Discover ALKERMES PLC (NASDAQ:ALKS), an undervalued growth gem identified by our stock screener. NASDAQ:ALKS is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Unpacking NASDAQ:ALKS's Growth Rating

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:ALKS has achieved a 8 out of 10:

The Earnings Per Share has grown by an impressive 30.91% over the past year.
The Earnings Per Share has been growing by 14.87% on average over the past years. This is quite good.
ALKS shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.60%.
ALKS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 59.52% yearly.
The Revenue is expected to grow by 11.11% on average over the next years. This is quite good.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Understanding NASDAQ:ALKS's Valuation Score

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:ALKS, the assigned 7 reflects its valuation:

Based on the Price/Earnings ratio, ALKS is valued cheaper than 94.87% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, ALKS is valued cheaper than 97.85% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 19.00, ALKS is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaper than 94.87% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALKS is valued cheaply inside the industry as 95.86% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ALKS may justify a higher PE ratio.
ALKS's earnings are expected to grow with 92.02% in the coming years. This may justify a more expensive valuation.

Assessing Health for NASDAQ:ALKS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:ALKS was assigned a score of 6 for health:

An Altman-Z score of 3.58 indicates that ALKS is not in any danger for bankruptcy at the moment.
ALKS has a better Altman-Z score (3.58) than 77.32% of its industry peers.
ALKS has a debt to FCF ratio of 1.84. This is a very positive value and a sign of high solvency as it would only need 1.84 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.84, ALKS belongs to the best of the industry, outperforming 95.86% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that ALKS is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for ALKS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
A Current Ratio of 2.87 indicates that ALKS has no problem at all paying its short term obligations.
A Quick Ratio of 2.48 indicates that ALKS has no problem at all paying its short term obligations.

Exploring NASDAQ:ALKS's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:ALKS scores a 6 out of 10:

With an excellent Return On Assets value of 4.71%, ALKS belongs to the best of the industry, outperforming 95.20% of the companies in the same industry.
ALKS has a Return On Equity of 8.04%. This is amongst the best in the industry. ALKS outperforms 95.36% of its industry peers.
ALKS has a better Return On Invested Capital (5.13%) than 95.53% of its industry peers.
ALKS has a Profit Margin of 7.04%. This is amongst the best in the industry. ALKS outperforms 95.03% of its industry peers.
Looking at the Operating Margin, with a value of 7.56%, ALKS belongs to the top of the industry, outperforming 95.03% of the companies in the same industry.
ALKS has a Gross Margin of 84.54%. This is amongst the best in the industry. ALKS outperforms 88.58% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of ALKS

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.