For those who appreciate value investing, NASDAQ:ALKS is a compelling option with its solid fundamentals.

Last update: Dec 28, 2023

Our stock screener has spotted ALKERMES PLC (NASDAQ:ALKS) as an undervalued stock with solid fundamentals. NASDAQ:ALKS shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Looking at the 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:

96.16% of the companies in the same industry are more expensive than ALKS, based on the Price/Earnings ratio.
A Price/Forward Earnings ratio of 11.60 indicates a reasonable valuation of ALKS.
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.
The average S&P500 Price/Forward Earnings ratio is at 21.06. ALKS is valued slightly cheaper when compared to this.
Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaply inside the industry as 96.66% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 97.00% 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.
ALKS's earnings are expected to grow with 102.31% in the coming years. This may justify a more expensive valuation.

Profitability Examination for NASDAQ:ALKS

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:ALKS has earned a 6 out of 10:

Looking at the Return On Assets, with a value of 9.42%, ALKS belongs to the top of the industry, outperforming 97.33% of the companies in the same industry.
Looking at the Return On Equity, with a value of 15.85%, ALKS belongs to the top of the industry, outperforming 97.16% 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 96.16% of the companies in the same industry.
ALKS has a better Profit Margin (13.50%) than 96.83% of its industry peers.
ALKS has a better Operating Margin (13.89%) than 96.16% of its industry peers.
ALKS has a Gross Margin of 85.10%. This is amongst the best in the industry. ALKS outperforms 87.98% of its industry peers.

Assessing Health Metrics for NASDAQ:ALKS

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ALKS has achieved a 6 out of 10:

An Altman-Z score of 3.67 indicates that ALKS is not in any danger for bankruptcy at the moment.
The Altman-Z score of ALKS (3.67) is better than 73.29% 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.
With an excellent Debt to FCF ratio value of 1.15, ALKS belongs to the best of the industry, outperforming 95.83% 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.
A Quick Ratio of 2.53 indicates that ALKS has no problem at all paying its short term obligations.

Growth Assessment of NASDAQ:ALKS

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 7 out of 10:

The Earnings Per Share has grown by an impressive 211.63% over the past year.
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.
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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

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.