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

Last update: Nov 29, 2023

ALKERMES PLC (NASDAQ:ALKS) was identified as an affordable growth stock by our stock screener. NASDAQ:ALKS is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Growth Analysis for NASDAQ:ALKS

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:ALKS scores a 8 out of 10:

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.
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 40.56%.
ALKS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 61.20% yearly.
The Revenue is expected to grow by 11.68% on average over the next years. This is quite good.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.

Evaluating Valuation: NASDAQ:ALKS

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:ALKS was assigned a score of 8 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 96.49% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 24.46. ALKS is valued slightly cheaper when compared to this.
ALKS is valuated reasonably with a Price/Forward Earnings ratio of 11.89.
97.99% of the companies in the same industry are more expensive than ALKS, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ALKS to the average of the S&P500 Index (19.59), we can say ALKS is valued slightly cheaper.
ALKS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ALKS is cheaper than 96.66% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 97.16% of the companies listed in the same industry.
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.

ChartMill's Evaluation of Health

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:

ALKS has an Altman-Z score of 3.18. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.
ALKS has a better Altman-Z score (3.18) than 76.92% of its industry peers.
The Debt to FCF ratio of ALKS is 1.15, which is an excellent value as it means it would take ALKS, only 1.15 years of fcf income to pay off all of its debts.
ALKS has a better Debt to FCF ratio (1.15) than 95.82% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that ALKS is not too dependend on debt financing.
Although ALKS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
A Current Ratio of 2.91 indicates that ALKS has no problem at all paying its short term obligations.
A Quick Ratio of 2.53 indicates that ALKS has no problem at all paying its short term obligations.

Profitability Analysis for NASDAQ:ALKS

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

Looking at the Return On Assets, with a value of 9.42%, ALKS belongs to the top of the industry, outperforming 97.32% of the companies in the same industry.
The Return On Equity of ALKS (15.85%) is better than 97.16% of its industry peers.
ALKS has a Return On Invested Capital of 9.83%. This is amongst the best in the industry. ALKS outperforms 96.15% of its industry peers.
ALKS has a Profit Margin of 13.50%. This is amongst the best in the industry. ALKS outperforms 96.82% of its industry peers.
ALKS has a Operating Margin of 13.89%. This is amongst the best in the industry. ALKS outperforms 96.15% of its industry peers.
ALKS's Gross Margin of 85.10% is amongst the best of the industry. ALKS outperforms 87.96% 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.