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

Last update: Feb 1, 2024

ALKERMES PLC (NASDAQ:ALKS) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:ALKS is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Unpacking NASDAQ:ALKS's Growth Rating

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:

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.
The Revenue has grown by 40.56% in the past year. This is a very strong growth!
Based on estimates for the next years, ALKS will show a very strong growth in Earnings Per Share. The EPS will grow by 52.71% on average per year.
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.

Deciphering NASDAQ:ALKS's Valuation Rating

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:

Compared to the rest of the industry, the Price/Earnings ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 96.80% of the companies listed in the same industry.
ALKS is valuated rather cheaply when we compare the Price/Earnings ratio to 25.93, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.41 indicates a reasonable valuation of ALKS.
98.31% 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 (21.16), we can say ALKS is valued slightly cheaper.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 96.46% of the companies listed in the same industry.
ALKS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALKS is cheaper than 97.47% of the companies in the same industry.
The 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 97.17% in the coming years. This may justify a more expensive valuation.

Analyzing Health Metrics

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:

ALKS has an Altman-Z score of 3.56. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.56, ALKS is in the better half of the industry, outperforming 73.69% of the companies in the same industry.
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.
The Debt to FCF ratio of ALKS (1.15) is better than 95.95% of its industry peers.
ALKS has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
Even though the debt/equity ratio score it not favorable for ALKS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
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.

What does the Profitability looks like for NASDAQ:ALKS

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:ALKS has achieved a 6:

ALKS's Return On Assets of 9.42% is amongst the best of the industry. ALKS outperforms 97.47% of its industry peers.
With an excellent Return On Equity value of 15.85%, ALKS belongs to the best of the industry, outperforming 97.30% of the companies in the same industry.
ALKS's Return On Invested Capital of 9.83% is amongst the best of the industry. ALKS outperforms 96.12% of its industry peers.
ALKS's Profit Margin of 13.50% is amongst the best of the industry. ALKS outperforms 96.96% of its industry peers.
ALKS's Operating Margin of 13.89% is amongst the best of the industry. ALKS outperforms 96.12% of its industry peers.
ALKS has a Gross Margin of 85.10%. This is amongst the best in the industry. ALKS outperforms 88.03% 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.

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.