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

ALKERMES PLC (NASDAQ:ALKS) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:ALKS showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Exploring NASDAQ:ALKS's Valuation

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 cheaper than 97.11% of the companies in the same industry.
• When comparing the Price/Earnings ratio of ALKS to the average of the S&P500 Index (26.05), we can say ALKS is valued slightly cheaper.
• With a Price/Forward Earnings ratio of 9.60, the valuation of ALKS can be described as very reasonable.
• Based on the Price/Forward Earnings ratio, ALKS is valued cheaply inside the industry as 98.98% of the companies are valued more expensively.
• The average S&P500 Price/Forward Earnings ratio is at 22.42. ALKS is valued rather cheaply when compared to this.
• Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaply inside the industry as 98.30% 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 98.64% of the companies listed 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.
• A more expensive valuation may be justified as ALKS's earnings are expected to grow with 25.27% in the coming years.

Exploring NASDAQ:ALKS's Profitability

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 better Return On Assets (16.66%) than 99.15% of its industry peers.
• Looking at the Return On Equity, with a value of 29.59%, ALKS belongs to the top of the industry, outperforming 98.30% of the companies in the same industry.
• ALKS's Return On Invested Capital of 20.54% is amongst the best of the industry. ALKS outperforms 99.32% of its industry peers.
• The Profit Margin of ALKS (21.39%) is better than 97.79% of its industry peers.
• The Operating Margin of ALKS (25.25%) is better than 97.79% of its industry peers.
• ALKS has a Gross Margin of 84.78%. This is amongst the best in the industry. ALKS outperforms 89.29% of its industry peers.

Unpacking NASDAQ:ALKS's Health Rating

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:ALKS has earned a 7 out of 10:

• ALKS has an Altman-Z score of 3.97. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.
• ALKS's Altman-Z score of 3.97 is fine compared to the rest of the industry. ALKS outperforms 75.68% of its industry peers.
• The Debt to FCF ratio of ALKS is 0.82, which is an excellent value as it means it would take ALKS, only 0.82 years of fcf income to pay off all of its debts.
• ALKS has a Debt to FCF ratio of 0.82. This is amongst the best in the industry. ALKS outperforms 96.26% of its industry peers.
• A Debt/Equity ratio of 0.24 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 2.86. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.
• A Quick Ratio of 2.50 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 6 out of 10:

• The Earnings Per Share has grown by an impressive 317.65% 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 18.41% yearly.
• The Revenue has grown by 49.61% in the past year. This is a very strong growth!
• Measured over the past years, ALKS shows a quite strong growth in Revenue. The Revenue has been growing by 8.74% on average per year.
• ALKS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.76% yearly.

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

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.