NASDAQ:INCY is not too expensive for the growth it is showing.

Last update: Feb 1, 2024

INCYTE CORP (NASDAQ:INCY) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:INCY is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Exploring NASDAQ:INCY's Growth

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:INCY has achieved a 7 out of 10:

INCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.28%, which is quite impressive.
The Revenue has grown by 8.35% in the past year. This is quite good.
The Revenue has been growing by 17.18% on average over the past years. This is quite good.
Based on estimates for the next years, INCY will show a very strong growth in Earnings Per Share. The EPS will grow by 24.61% on average per year.
The Revenue is expected to grow by 10.82% on average over the next years. This is quite good.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Valuation Assessment of NASDAQ:INCY

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:INCY has received a 8 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 97.13% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of INCY to the average of the S&P500 Index (25.93), we can say INCY is valued slightly cheaper.
Based on the Price/Forward Earnings ratio, INCY is valued cheaper than 97.98% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.16. INCY is valued slightly cheaper when compared to this.
Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaply inside the industry as 95.28% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 96.46% of the companies listed 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 INCY may justify a higher PE ratio.
A more expensive valuation may be justified as INCY's earnings are expected to grow with 26.42% in the coming years.

Health Examination for NASDAQ:INCY

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:INCY, the assigned 7 reflects its health status:

An Altman-Z score of 6.88 indicates that INCY is not in any danger for bankruptcy at the moment.
INCY has a better Altman-Z score (6.88) than 80.94% of its industry peers.
The Debt to FCF ratio of INCY is 0.05, which is an excellent value as it means it would take INCY, only 0.05 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.05, INCY belongs to the best of the industry, outperforming 97.47% of the companies in the same industry.
INCY has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 3.91 indicates that INCY has no problem at all paying its short term obligations.
INCY has a Quick Ratio of 3.86. This indicates that INCY is financially healthy and has no problem in meeting its short term obligations.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:INCY has earned a 7 out of 10:

INCY's Return On Assets of 6.65% is amongst the best of the industry. INCY outperforms 96.46% of its industry peers.
The Return On Equity of INCY (8.62%) is better than 95.62% of its industry peers.
INCY has a better Return On Invested Capital (6.60%) than 95.78% of its industry peers.
Looking at the Profit Margin, with a value of 11.78%, INCY belongs to the top of the industry, outperforming 96.63% of the companies in the same industry.
INCY's Operating Margin of 14.96% is amongst the best of the industry. INCY outperforms 96.46% of its industry peers.
INCY has a Gross Margin of 93.84%. This is amongst the best in the industry. INCY outperforms 94.27% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.