In a market where value is scarce, NASDAQ:ALKS offers a refreshing opportunity with its solid fundamentals.

Discover ALKERMES PLC (NASDAQ:ALKS), an undervalued stock highlighted by our stock screener. NASDAQ:ALKS showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

ChartMill's Evaluation of Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:ALKS scores a 9 out of 10:

• 97.75% of the companies in the same industry are more expensive than ALKS, based on the Price/Earnings ratio.
• ALKS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.20.
• The Price/Forward Earnings ratio is 8.98, which indicates a very decent valuation of ALKS.
• Based on the Price/Forward Earnings ratio, ALKS is valued cheaply inside the industry as 98.10% of the companies are valued more expensively.
• ALKS is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.02, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaply inside the industry as 98.62% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, ALKS is valued cheaply inside the industry as 99.14% of the companies are valued more expensively.
• The 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 24.42% in the coming years.

A Closer Look at Profitability for NASDAQ:ALKS

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:ALKS was assigned a score of 6 for profitability:

• ALKS's Return On Assets of 20.46% is amongst the best of the industry. ALKS outperforms 99.14% of its industry peers.
• With an excellent Return On Equity value of 34.63%, ALKS belongs to the best of the industry, outperforming 98.79% of the companies in the same industry.
• The Return On Invested Capital of ALKS (24.24%) is better than 99.14% of its industry peers.
• Looking at the Profit Margin, with a value of 25.17%, ALKS belongs to the top of the industry, outperforming 98.27% of the companies in the same industry.
• The Operating Margin of ALKS (29.60%) is better than 98.45% of its industry peers.
• The Gross Margin of ALKS (85.31%) is better than 89.64% of its industry peers.

Evaluating Health: 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 7 out of 10:

• An Altman-Z score of 4.09 indicates that ALKS is not in any danger for bankruptcy at the moment.
• ALKS's Altman-Z score of 4.09 is fine compared to the rest of the industry. ALKS outperforms 77.72% of its industry peers.
• ALKS has a debt to FCF ratio of 0.74. This is a very positive value and a sign of high solvency as it would only need 0.74 years to pay back of all of its debts.
• The Debt to FCF ratio of ALKS (0.74) is better than 96.55% of its industry peers.
• A Debt/Equity ratio of 0.23 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.
• A Current Ratio of 3.20 indicates that ALKS has no problem at all paying its short term obligations.
• ALKS has a Quick Ratio of 2.77. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.

Growth Examination for NASDAQ:ALKS

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:ALKS boasts a 5 out of 10:

• The Earnings Per Share has grown by an impressive 700.00% 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.
• ALKS shows a strong growth in Revenue. In the last year, the Revenue has grown by 54.00%.
• ALKS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.74% yearly.
• The Earnings Per Share is expected to grow by 10.51% on average over the next years. This is quite good.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

This article should in no way be interpreted as advice. 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.