NASDAQ:INCY, an undervalued stock with good fundamentals.

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

Assessing Valuation Metrics for NASDAQ:INCY

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:INCY boasts a 7 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 93.95% of the companies listed in the same industry.
• Based on the Price/Forward Earnings ratio of 11.16, the valuation of INCY can be described as reasonable.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 97.69% 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 (23.99), we can say INCY is valued rather cheaply.
• 93.24% of the companies in the same industry are more expensive than INCY, based on the Enterprise Value to EBITDA ratio.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 92.53% of the companies listed in the same industry.
• The excellent 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 30.91% in the coming years.

Understanding NASDAQ:INCY's Profitability

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:

• INCY's Return On Assets of 0.65% is amongst the best of the industry. INCY outperforms 92.70% of its industry peers.
• INCY's Return On Equity of 1.02% is amongst the best of the industry. INCY outperforms 93.59% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 0.38%, INCY belongs to the top of the industry, outperforming 93.24% of the companies in the same industry.
• The last Return On Invested Capital (0.38%) for INCY is well below the 3 year average (9.11%), which needs to be investigated, but indicates that INCY had better years and this may not be a problem.
• INCY's Profit Margin of 0.80% is amongst the best of the industry. INCY outperforms 93.24% of its industry peers.
• INCY's Profit Margin has improved in the last couple of years.
• INCY has a Operating Margin of 0.48%. This is amongst the best in the industry. INCY outperforms 93.42% of its industry peers.
• In the last couple of years the Operating Margin of INCY has grown nicely.
• The Gross Margin of INCY (93.37%) is better than 94.48% of its industry peers.

A Closer Look at Health for NASDAQ:INCY

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:INCY has received a 7 out of 10:

• INCY has an Altman-Z score of 5.17. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
• INCY has a Altman-Z score of 5.17. This is amongst the best in the industry. INCY outperforms 80.61% of its industry peers.
• The Debt to FCF ratio of INCY is 1.05, which is an excellent value as it means it would take INCY, only 1.05 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.05, INCY belongs to the top of the industry, outperforming 95.73% of the companies in the same industry.
• A Debt/Equity ratio of 0.01 indicates that INCY is not too dependend on debt financing.
• The current and quick ratio evaluation for INCY is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Analyzing Growth Metrics

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:INCY has earned a 6 for growth:

• Measured over the past years, INCY shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.86% on average per year.
• INCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.94%.
• 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 23.93% on average over the next years. This is a very strong growth
• Based on estimates for the next years, INCY will show a quite strong growth in Revenue. The Revenue will grow by 9.85% on average per year.

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

Check the latest full fundamental report of INCY 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.