NASDAQ:ALKS, an undervalued stock with good fundamentals.

Last update: Jan 19, 2024

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.

Deciphering NASDAQ:ALKS's Valuation Rating

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:ALKS has received a 8 out of 10:

Based on the Price/Earnings ratio, ALKS is valued cheaply inside the industry as 96.46% of the companies are valued more expensively.
The Price/Forward Earnings ratio is 11.47, which indicates a very decent valuation of ALKS.
98.65% 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 (20.61), we can say ALKS is valued slightly cheaper.
96.46% 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 cheaply inside the industry as 97.31% of the companies are valued more expensively.
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.
ALKS's earnings are expected to grow with 102.31% in the coming years. This may justify a more expensive valuation.

Profitability Insights: 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:

With an excellent Return On Assets value of 9.42%, ALKS belongs to the best of the industry, outperforming 97.47% 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 97.31% of the companies in the same industry.
ALKS has a Return On Invested Capital of 9.83%. This is amongst the best in the industry. ALKS outperforms 96.13% of its industry peers.
The Profit Margin of ALKS (13.50%) is better than 96.97% of its industry peers.
With an excellent Operating Margin value of 13.89%, ALKS belongs to the best of the industry, outperforming 96.13% of the companies in the same industry.
Looking at the Gross Margin, with a value of 85.10%, ALKS belongs to the top of the industry, outperforming 88.05% of the companies in the same industry.

Health Assessment of 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.
With a decent Altman-Z score value of 3.64, ALKS is doing good in the industry, outperforming 73.91% of the companies in the same industry.
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 95.96% 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.

Growth Examination for 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:

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.
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

Disclaimer

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.