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

Our stock screener has spotted ALKERMES PLC (NASDAQ:ALKS) as a growth stock which is not overvalued. NASDAQ:ALKS is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Examination for NASDAQ:ALKS

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:ALKS has earned a 7 for growth:

• The Earnings Per Share has grown by an impressive 211.63% over the past year.
• 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%.
• ALKS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 52.71% 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.
• 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

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 8 reflects its valuation:

• Based on the Price/Earnings ratio, ALKS is valued cheaply inside the industry as 96.01% of the companies are valued more expensively.
• ALKS is valuated reasonably with a Price/Forward Earnings ratio of 11.46.
• ALKS's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALKS is cheaper than 98.50% of the companies in the same industry.
• ALKS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.31, which is the current average of the S&P500 Index.
• 96.51% of the companies in the same industry are more expensive than ALKS, based on the Enterprise Value to EBITDA ratio.
• 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 102.31% in the coming years.

Evaluating Health: NASDAQ:ALKS

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:ALKS, the assigned 6 for health provides valuable insights:

• An Altman-Z score of 3.64 indicates that ALKS is not in any danger for bankruptcy at the moment.
• ALKS has a Altman-Z score of 3.64. This is in the better half of the industry: ALKS outperforms 75.08% 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.
• ALKS's Debt to FCF ratio of 1.15 is amongst the best of the industry. ALKS outperforms 95.85% 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.
• 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.

How do we evaluate the Profitability for NASDAQ:ALKS?

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:ALKS, the assigned 6 is a significant indicator of profitability:

• The Return On Assets of ALKS (9.42%) is better than 97.34% of its industry peers.
• ALKS has a Return On Equity of 15.85%. This is amongst the best in the industry. ALKS outperforms 97.18% of its industry peers.
• ALKS's Return On Invested Capital of 9.83% is amongst the best of the industry. ALKS outperforms 96.18% of its industry peers.
• ALKS has a better Profit Margin (13.50%) than 96.84% of its industry peers.
• ALKS has a better Operating Margin (13.89%) than 96.18% of its industry peers.
• ALKS's Gross Margin of 85.10% is amongst the best of the industry. ALKS outperforms 88.04% of its industry peers.

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

Check the latest full fundamental report of ALKS for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.