NASDAQ:ALKS is an undervalued gem with solid fundamentals.

Our stock screening tool has pinpointed ALKERMES PLC (NASDAQ:ALKS) as an undervalued stock. NASDAQ:ALKS maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Understanding NASDAQ:ALKS's 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 9 reflects its valuation:

• 98.78% 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 28.73.
• Based on the Price/Forward Earnings ratio of 8.70, the valuation of ALKS can be described as reasonable.
• Based on the Price/Forward Earnings ratio, ALKS is valued cheaper than 98.25% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.32. ALKS is valued rather cheaply when compared to this.
• 98.78% 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 99.48% 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.
• The decent profitability rating of ALKS may justify a higher PE ratio.
• ALKS's earnings are expected to grow with 24.42% in the coming years. This may justify a more expensive valuation.

Evaluating Profitability: 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:

• ALKS has a Return On Assets of 20.46%. This is amongst the best in the industry. ALKS outperforms 99.30% of its industry peers.
• ALKS has a better Return On Equity (34.63%) than 98.78% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 24.24%, ALKS belongs to the top of the industry, outperforming 99.13% of the companies in the same industry.
• ALKS has a better Profit Margin (25.17%) than 98.25% of its industry peers.
• With an excellent Operating Margin value of 29.60%, ALKS belongs to the best of the industry, outperforming 98.43% of the companies in the same industry.
• ALKS has a better Gross Margin (85.31%) than 89.51% of its industry peers.

ChartMill's Evaluation of Health

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 7 for health provides valuable insights:

• An Altman-Z score of 4.00 indicates that ALKS is not in any danger for bankruptcy at the moment.
• ALKS's Altman-Z score of 4.00 is fine compared to the rest of the industry. ALKS outperforms 77.10% of its industry peers.
• The Debt to FCF ratio of ALKS is 0.74, which is an excellent value as it means it would take ALKS, only 0.74 years of fcf income to pay off all of its debts.
• ALKS has a better Debt to FCF ratio (0.74) than 96.68% of its industry peers.
• A Debt/Equity ratio of 0.23 indicates that ALKS is not too dependend on debt financing.
• 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.
• ALKS has a Current Ratio of 3.20. This indicates that ALKS is financially healthy and has no problem in meeting 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.

A Closer Look at Growth 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:

• ALKS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 700.00%, which is quite impressive.
• The Earnings Per Share has been growing by 18.41% 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 54.00%.
• The Revenue has been growing by 8.74% on average over the past years. This is quite good.
• Based on estimates for the next years, ALKS will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.51% on average per year.

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

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.