Despite its impressive fundamentals, NASDAQ:ALKS remains undervalued.

Our stock screener has singled out ALKERMES PLC (NASDAQ:ALKS) as a stellar value proposition. NASDAQ:ALKS not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Analysis for NASDAQ:ALKS

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:ALKS has achieved a 9 out of 10:

• 98.42% of the companies in the same industry are more expensive than ALKS, based on the Price/Earnings ratio.
• When comparing the Price/Earnings ratio of ALKS to the average of the S&P500 Index (29.64), we can say ALKS is valued rather cheaply.
• Based on the Price/Forward Earnings ratio of 10.49, the valuation of ALKS can be described as reasonable.
• Based on the Price/Forward Earnings ratio, ALKS is valued cheaply inside the industry as 97.72% of the companies are valued more expensively.
• ALKS is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.00, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaper than 98.24% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 98.59% of the companies listed in the same industry.
• 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 24.74% in the coming years. This may justify a more expensive valuation.

Profitability Analysis for 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's Return On Assets of 13.08% is amongst the best of the industry. ALKS outperforms 98.42% of its industry peers.
• ALKS has a Return On Equity of 22.49%. This is amongst the best in the industry. ALKS outperforms 98.59% of its industry peers.
• ALKS's Return On Invested Capital of 17.82% is amongst the best of the industry. ALKS outperforms 98.07% of its industry peers.
• Looking at the Profit Margin, with a value of 19.15%, ALKS belongs to the top of the industry, outperforming 97.89% of the companies in the same industry.
• The Operating Margin of ALKS (25.30%) is better than 97.89% of its industry peers.
• The Gross Margin of ALKS (83.31%) is better than 88.58% of its industry peers.

Understanding NASDAQ:ALKS's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ALKS, the assigned 7 reflects its health status:

• An Altman-Z score of 4.12 indicates that ALKS is not in any danger for bankruptcy at the moment.
• ALKS has a Altman-Z score of 4.12. This is in the better half of the industry: ALKS outperforms 76.80% of its industry peers.
• The Debt to FCF ratio of ALKS is 0.88, which is an excellent value as it means it would take ALKS, only 0.88 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 0.88, ALKS belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
• A Debt/Equity ratio of 0.22 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 2.99. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.
• ALKS has a Quick Ratio of 2.61. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.

Unpacking NASDAQ:ALKS's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:ALKS has received a 5 out of 10:

• The Earnings Per Share has grown by an impressive 176.39% 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.
• 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 10.51% yearly.

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.