NASDAQ:INCY is showing decent growth, but is still valued reasonably.

Last update: May 17, 2024

Discover INCYTE CORP (NASDAQ:INCY), an undervalued growth gem identified by our stock screener. NASDAQ:INCY is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Understanding NASDAQ:INCY's Growth Score

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:INCY boasts a 7 out of 10:

The Earnings Per Share has grown by an impressive 45.77% over the past year.
INCY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.86% yearly.
The Revenue has grown by 8.58% in the past year. This is quite good.
INCY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.45% yearly.
INCY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.85% yearly.
Based on estimates for the next years, INCY will show a quite strong growth in Revenue. The Revenue will grow by 8.58% on average per year.

Understanding NASDAQ:INCY's Valuation Score

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:INCY was assigned a score of 8 for valuation:

96.92% of the companies in the same industry are more expensive than INCY, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of INCY to the average of the S&P500 Index (28.83), we can say INCY is valued slightly cheaper.
The Price/Forward Earnings ratio is 10.34, which indicates a very decent valuation of INCY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 98.12% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of INCY to the average of the S&P500 Index (20.47), we can say INCY is valued slightly cheaper.
Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaply inside the industry as 97.44% 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 97.95% 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.
INCY has an outstanding profitability rating, which 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 5.90. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.90, INCY belongs to the top of the industry, outperforming 81.37% of the companies in the same industry.
INCY has a debt to FCF ratio of 0.04. This is a very positive value and a sign of high solvency as it would only need 0.04 years to pay back of all of its debts.
INCY has a better Debt to FCF ratio (0.04) than 98.12% of its industry peers.
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 3.47 indicates that INCY has no problem at all paying its short term obligations.
A Quick Ratio of 3.43 indicates that INCY has no problem at all paying its short term obligations.

Profitability Examination for NASDAQ:INCY

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:INCY was assigned a score of 8 for profitability:

With an excellent Return On Assets value of 10.45%, INCY belongs to the best of the industry, outperforming 97.27% of the companies in the same industry.
INCY's Return On Equity of 13.82% is amongst the best of the industry. INCY outperforms 96.41% of its industry peers.
The Return On Invested Capital of INCY (8.44%) is better than 96.07% of its industry peers.
INCY has a Profit Margin of 19.78%. This is amongst the best in the industry. INCY outperforms 97.61% of its industry peers.
INCY's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 18.91%, INCY belongs to the best of the industry, outperforming 96.92% of the companies in the same industry.
In the last couple of years the Operating Margin of INCY has grown nicely.
Looking at the Gross Margin, with a value of 93.73%, INCY belongs to the top of the industry, outperforming 95.21% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.