NASDAQ:ALKS: good value for what you're paying.

Last update: Sep 13, 2024

Discover ALKERMES PLC (NASDAQ:ALKS)—an undervalued stock our stock screener has picked out. NASDAQ:ALKS demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

A Closer Look at Valuation for NASDAQ:ALKS

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:ALKS boasts a 9 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 97.88% of the companies listed in the same industry.
ALKS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 30.24.
ALKS is valuated reasonably with a Price/Forward Earnings ratio of 9.95.
ALKS's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALKS is cheaper than 98.23% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ALKS to the average of the S&P500 Index (21.81), we can say ALKS is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 98.41% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ALKS is valued cheaper than 98.23% of the companies 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.
The decent profitability rating of ALKS may justify a higher PE ratio.
ALKS's earnings are expected to grow with 25.62% in the coming years. This may justify a more expensive valuation.

What does the Profitability looks like 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 has a Return On Assets of 13.08%. This is amongst the best in the industry. ALKS outperforms 98.06% of its industry peers.
With an excellent Return On Equity value of 22.49%, ALKS belongs to the best of the industry, outperforming 98.23% of the companies in the same industry.
ALKS's Return On Invested Capital of 17.82% is amongst the best of the industry. ALKS outperforms 97.88% of its industry peers.
Looking at the Profit Margin, with a value of 19.15%, ALKS belongs to the top of the industry, outperforming 97.53% of the companies in the same industry.
With an excellent Operating Margin value of 25.30%, ALKS belongs to the best of the industry, outperforming 97.53% of the companies in the same industry.
ALKS has a Gross Margin of 83.31%. This is amongst the best in the industry. ALKS outperforms 88.52% of its industry peers.

Health Insights: NASDAQ:ALKS

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ALKS has received a 7 out of 10:

An Altman-Z score of 3.88 indicates that ALKS is not in any danger for bankruptcy at the moment.
ALKS has a better Altman-Z score (3.88) than 77.03% of its industry peers.
ALKS has a debt to FCF ratio of 0.88. This is a very positive value and a sign of high solvency as it would only need 0.88 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.88, ALKS belongs to the best of the industry, outperforming 96.82% 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.

Understanding NASDAQ:ALKS's Growth Score

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 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.
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.

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

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.