Don't overlook NASDAQ:INCY—a stock with solid growth prospects and a reasonable valuation.

Last update: Apr 26, 2024

INCYTE CORP (NASDAQ:INCY) was identified as an affordable growth stock by our stock screener. NASDAQ:INCY is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

A Closer Look at Growth for NASDAQ:INCY

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:INCY has received a 7 out of 10:

The Earnings Per Share has grown by an impressive 26.62% over the past year.
The Earnings Per Share has been growing by 27.86% on average over the past years. This is a very strong growth
INCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.87%.
The Revenue has been growing by 14.45% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 18.66% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.13% on average over the next years. This is quite good.

Valuation Assessment of NASDAQ:INCY

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:INCY, the assigned 8 reflects its valuation:

97.26% of the companies in the same industry are more expensive than INCY, based on the Price/Earnings ratio.
INCY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.20.
Based on the Price/Forward Earnings ratio of 11.04, the valuation of INCY can be described as reasonable.
Based on the Price/Forward Earnings ratio, INCY is valued cheaply inside the industry as 98.29% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.63, INCY is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaply inside the industry as 97.77% of the companies are valued more expensively.
INCY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. INCY is cheaper than 96.23% 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 excellent profitability rating of INCY may justify a higher PE ratio.
INCY's earnings are expected to grow with 24.94% in the coming years. This may justify a more expensive valuation.

Unpacking NASDAQ:INCY's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:INCY has earned a 7 out of 10:

INCY has an Altman-Z score of 5.83. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
INCY has a better Altman-Z score (5.83) than 82.19% of its industry peers.
The Debt to FCF ratio of INCY is 0.07, which is an excellent value as it means it would take INCY, only 0.07 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of INCY (0.07) is better than 97.60% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that INCY is not too dependend on debt financing.
A Current Ratio of 3.75 indicates that INCY has no problem at all paying its short term obligations.
INCY has a Quick Ratio of 3.69. This indicates that INCY is financially healthy and has no problem in meeting its short term obligations.

Profitability Insights: NASDAQ:INCY

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:INCY, the assigned 8 is a significant indicator of profitability:

The Return On Assets of INCY (8.81%) is better than 96.92% of its industry peers.
Looking at the Return On Equity, with a value of 11.51%, INCY belongs to the top of the industry, outperforming 96.58% of the companies in the same industry.
With an excellent Return On Invested Capital value of 8.00%, INCY belongs to the best of the industry, outperforming 96.40% of the companies in the same industry.
INCY has a better Profit Margin (16.17%) than 97.09% of its industry peers.
In the last couple of years the Profit Margin of INCY has grown nicely.
Looking at the Operating Margin, with a value of 17.64%, INCY belongs to the top of the industry, outperforming 96.75% of the companies in the same industry.
In the last couple of years the Operating Margin of INCY has grown nicely.
INCY's Gross Margin of 93.71% is amongst the best of the industry. INCY outperforms 95.21% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

Disclaimer

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.