NASDAQ:ALKS is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Our stock screening tool has pinpointed ALKERMES PLC (NASDAQ:ALKS) as an undervalued stock option. NASDAQ:ALKS retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Understanding 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:

• 96.99% of the companies in the same industry are more expensive than ALKS, based on the Price/Earnings ratio.
• ALKS is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 95.75% of the companies listed in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 24.44. ALKS is valued slightly cheaper when compared to this.
• Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaply inside the industry as 98.94% of the companies are valued more expensively.
• ALKS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALKS is cheaper than 97.17% of the companies 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.
• ALKS's earnings are expected to grow with 16.55% in the coming years. This may justify a more expensive valuation.

What does the Profitability looks like for NASDAQ:ALKS

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:ALKS, the assigned 6 is a significant indicator of profitability:

• Looking at the Return On Assets, with a value of 15.47%, ALKS belongs to the top of the industry, outperforming 97.70% of the companies in the same industry.
• ALKS has a Return On Equity of 25.80%. This is amongst the best in the industry. ALKS outperforms 98.05% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 20.27%, ALKS belongs to the top of the industry, outperforming 98.41% of the companies in the same industry.
• ALKS has a Profit Margin of 22.15%. This is amongst the best in the industry. ALKS outperforms 97.17% of its industry peers.
• ALKS has a Operating Margin of 29.00%. This is amongst the best in the industry. ALKS outperforms 98.23% of its industry peers.
• The Gross Margin of ALKS (83.17%) is better than 87.96% of its industry peers.

Assessing Health Metrics for NASDAQ:ALKS

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 4.64 indicates that ALKS is not in any danger for bankruptcy at the moment.
• ALKS has a better Altman-Z score (4.64) than 80.35% of its industry peers.
• The Debt to FCF ratio of ALKS is 0.92, which is an excellent value as it means it would take ALKS, only 0.92 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of ALKS (0.92) is better than 95.93% of its industry peers.
• A Debt/Equity ratio of 0.22 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 3.45. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.
• A Quick Ratio of 3.03 indicates that ALKS has no problem at all paying its short term obligations.

Growth Examination for NASDAQ:ALKS

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:ALKS, the assigned 4 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 54.48% 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 been growing by 8.74% on average over the past years. This is quite good.

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

Check the latest full fundamental report of ALKS for a complete fundamental analysis.

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.