For those who appreciate growth without the sticker shock, NASDAQ:ALKS is worth considering.

Last update: Nov 7, 2023

Consider ALKERMES PLC (NASDAQ:ALKS) as an affordable growth stock, identified by our stock screening tool. NASDAQ:ALKS is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

A Closer Look at Growth for NASDAQ:ALKS

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:ALKS, the assigned 8 reflects its growth potential:

ALKS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 211.63%, which is quite impressive.
Measured over the past years, ALKS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.87% on average per year.
The Revenue has grown by 40.56% in the past year. This is a very strong growth!
The Earnings Per Share is expected to grow by 61.20% on average over the next years. This is a very strong growth
ALKS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.68% yearly.
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

How We Gauge Valuation for NASDAQ:ALKS

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:ALKS boasts a 8 out of 10:

96.02% of the companies in the same industry are more expensive than ALKS, based on the Price/Earnings ratio.
ALKS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.48.
Based on the Price/Forward Earnings ratio, ALKS is valued cheaply inside the industry as 97.51% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 18.84. ALKS is valued slightly cheaper when compared to this.
ALKS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ALKS is cheaper than 96.52% of the companies in the same industry.
97.35% of the companies in the same industry are more expensive than ALKS, based on the Price/Free Cash Flow ratio.
ALKS's 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.
A more expensive valuation may be justified as ALKS's earnings are expected to grow with 87.15% in the coming years.

Health Analysis for NASDAQ:ALKS

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ALKS, the assigned 6 reflects its health status:

An Altman-Z score of 3.34 indicates that ALKS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.34, ALKS is in the better half of the industry, outperforming 77.61% of the companies in the same industry.
ALKS has a debt to FCF ratio of 1.15. This is a very positive value and a sign of high solvency as it would only need 1.15 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.15, ALKS belongs to the top of the industry, outperforming 95.85% of the companies in the same industry.
A Debt/Equity ratio of 0.21 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.
ALKS has a Current Ratio of 2.91. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.
ALKS has a Quick Ratio of 2.53. This indicates that ALKS is financially healthy and has no problem in meeting 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:

ALKS has a Return On Assets of 9.42%. This is amongst the best in the industry. ALKS outperforms 96.52% of its industry peers.
ALKS has a better Return On Equity (15.84%) than 96.19% of its industry peers.
ALKS's Return On Invested Capital of 9.83% is amongst the best of the industry. ALKS outperforms 96.35% of its industry peers.
ALKS's Profit Margin of 13.50% is amongst the best of the industry. ALKS outperforms 96.35% of its industry peers.
With an excellent Operating Margin value of 13.89%, ALKS belongs to the best of the industry, outperforming 96.35% of the companies in the same industry.
ALKS's Gross Margin of 85.11% is amongst the best of the industry. ALKS outperforms 88.72% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Our latest full fundamental report of ALKS contains the most current fundamental analsysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.