Investors should take notice of NASDAQ:INCY—it offers a great deal for the fundamentals it presents.

Last update: Jan 24, 2025

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.

Evaluating Valuation: NASDAQ:INCY

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:INCY has earned a 7 for valuation:

INCY's Price/Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 93.81% of the companies in the same industry.
A Price/Forward Earnings ratio of 11.58 indicates a reasonable 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 97.52% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.51, INCY is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaper than 93.27% of the companies in the same industry.
92.57% of the companies in the same industry are more expensive than INCY, based on the Price/Free Cash Flow ratio.
The excellent profitability rating of INCY may justify a higher PE ratio.
INCY's earnings are expected to grow with 30.91% in the coming years. This may justify a more expensive valuation.

Evaluating Profitability: NASDAQ:INCY

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:INCY, the assigned 8 is noteworthy for profitability:

The Return On Assets of INCY (0.65%) is better than 92.92% of its industry peers.
INCY's Return On Equity of 1.02% is amongst the best of the industry. INCY outperforms 93.63% 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 93.27% 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.
Looking at the Profit Margin, with a value of 0.80%, INCY belongs to the top of the industry, outperforming 93.27% of the companies in the same industry.
In the last couple of years the Profit Margin of INCY has grown nicely.
INCY has a Operating Margin of 0.48%. This is amongst the best in the industry. INCY outperforms 93.45% 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 94.51% of its industry peers.

Assessing Health for NASDAQ:INCY

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:

An Altman-Z score of 5.34 indicates that INCY is not in any danger for bankruptcy at the moment.
INCY has a Altman-Z score of 5.34. This is amongst the best in the industry. INCY outperforms 81.95% of its industry peers.
INCY has a debt to FCF ratio of 1.05. This is a very positive value and a sign of high solvency as it would only need 1.05 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.05, INCY belongs to the best of the industry, outperforming 95.75% 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.
INCY does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding 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 6 out of 10:

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.
The Revenue has grown by 12.94% in the past year. This is quite good.
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 24.08% on average over the next years. This is a very strong growth
INCY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.81% yearly.

More Decent Value stocks can be found in our Decent Value 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.