When you look at NASDAQ:ALKS, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Dec 7, 2023

Consider ALKERMES PLC (NASDAQ:ALKS) as a top value stock, identified by our stock screening tool. NASDAQ:ALKS shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

How do we evaluate the 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:

Based on the Price/Earnings ratio, ALKS is valued cheaply inside the industry as 96.01% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ALKS to the average of the S&P500 Index (24.78), we can say ALKS is valued slightly cheaper.
97.34% of the companies in the same industry are more expensive than ALKS, based on the Price/Forward Earnings ratio.
ALKS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 19.90, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 96.51% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ALKS is valued cheaper than 97.18% of the companies 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.
ALKS has a very decent profitability rating, which 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.

Evaluating Profitability: NASDAQ:ALKS

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:ALKS, the assigned 6 is noteworthy for profitability:

ALKS has a Return On Assets of 9.42%. This is amongst the best in the industry. ALKS outperforms 97.34% of its industry peers.
Looking at the Return On Equity, with a value of 15.85%, ALKS belongs to the top of the industry, outperforming 97.18% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.83%, ALKS belongs to the best of the industry, outperforming 96.18% of the companies in the same industry.
ALKS has a Profit Margin of 13.50%. This is amongst the best in the industry. ALKS outperforms 96.84% of its industry peers.
Looking at the Operating Margin, with a value of 13.89%, ALKS belongs to the top of the industry, outperforming 96.18% of the companies in the same industry.
ALKS's Gross Margin of 85.10% is amongst the best of the industry. ALKS outperforms 88.04% of its industry peers.

Health Examination for NASDAQ:ALKS

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ALKS has received a 6 out of 10:

ALKS has an Altman-Z score of 3.49. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ALKS (3.49) is better than 75.91% of its industry peers.
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 95.68% of the companies in the same industry.
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.
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.

ChartMill's Evaluation of Growth

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:ALKS has received 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.
ALKS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.87% yearly.
Looking at the last year, ALKS shows a very strong growth in Revenue. The Revenue has grown by 40.56%.
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.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

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

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.