Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


HALOZYME THERAPEUTICS INC

Nasdaq / Health Care / Biotechnology

Fundamental Rating

7

Taking everything into account, HALO scores 7 out of 10 in our fundamental rating. HALO was compared to 565 industry peers in the Biotechnology industry. HALO gets an excellent profitability rating and is at the same time showing great financial health properties. HALO is growing strongly while it also seems undervalued. This is an interesting combination These ratings could make HALO a good candidate for value and growth and quality investing.



7

1. Profitability

1.1 Basic Checks

In the past year HALO was profitable.
In the past year HALO had a positive cash flow from operations.
HALO had positive earnings in 4 of the past 5 years.
Of the past 5 years HALO 4 years had a positive operating cash flow.

1.2 Ratios

HALO has a better Return On Assets (18.53%) than 98.40% of its industry peers.
HALO has a better Return On Equity (86.69%) than 99.64% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.23%, HALO belongs to the top of the industry, outperforming 97.68% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HALO is above the industry average of 15.31%.
The last Return On Invested Capital (19.23%) for HALO is above the 3 year average (17.78%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 18.53%
ROE 86.69%
ROIC 19.23%
ROA(3y)21.23%
ROA(5y)14.64%
ROE(3y)219.81%
ROE(5y)133.26%
ROIC(3y)17.78%
ROIC(5y)N/A

1.3 Margins

HALO has a Profit Margin of 41.43%. This is amongst the best in the industry. HALO outperforms 98.93% of its industry peers.
In the last couple of years the Profit Margin of HALO has declined.
HALO's Operating Margin of 50.35% is amongst the best of the industry. HALO outperforms 99.82% of its industry peers.
HALO's Operating Margin has declined in the last couple of years.
HALO has a better Gross Margin (82.09%) than 86.99% of its industry peers.
HALO's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 50.35%
PM (TTM) 41.43%
GM 82.09%
OM growth 3Y-8.72%
OM growth 5YN/A
PM growth 3Y-11.05%
PM growth 5YN/A
GM growth 3Y-2.86%
GM growth 5Y-3.81%

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7

2. Health

2.1 Basic Checks

HALO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
HALO has less shares outstanding than it did 1 year ago.
HALO has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HALO is higher compared to a year ago.

2.2 Solvency

HALO has an Altman-Z score of 4.13. This indicates that HALO is financially healthy and has little risk of bankruptcy at the moment.
HALO's Altman-Z score of 4.13 is fine compared to the rest of the industry. HALO outperforms 78.25% of its industry peers.
HALO has a debt to FCF ratio of 3.83. This is a good value and a sign of high solvency as HALO would need 3.83 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.83, HALO belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
A Debt/Equity ratio of 3.32 is on the high side and indicates that HALO has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.32, HALO is doing worse than 82.17% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 3.32
Debt/FCF 3.83
Altman-Z 4.13
ROIC/WACC2.05
WACC9.39%

2.3 Liquidity

A Current Ratio of 10.36 indicates that HALO has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 10.36, HALO belongs to the top of the industry, outperforming 82.17% of the companies in the same industry.
A Quick Ratio of 9.15 indicates that HALO has no problem at all paying its short term obligations.
The Quick ratio of HALO (9.15) is better than 78.97% of its industry peers.
Industry RankSector Rank
Current Ratio 10.36
Quick Ratio 9.15

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9

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 55.33% over the past year.
The Earnings Per Share has been growing by 45.64% on average over the past years. This is a very strong growth
The Revenue has grown by 21.36% in the past year. This is a very strong growth!
Measured over the past years, HALO shows a very strong growth in Revenue. The Revenue has been growing by 40.42% on average per year.
EPS 1Y (TTM)55.33%
EPS 3Y45.64%
EPS 5YN/A
EPS Q2Q%69.33%
Revenue 1Y (TTM)21.36%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Sales Q2Q%34.28%

3.2 Future

HALO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.47% yearly.
The Revenue is expected to grow by 15.95% on average over the next years. This is quite good.
EPS Next Y52.39%
EPS Next 2Y33.21%
EPS Next 3Y32.04%
EPS Next 5Y25.47%
Revenue Next Year20.74%
Revenue Next 2Y17.91%
Revenue Next 3Y19.06%
Revenue Next 5Y15.95%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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9

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 12.07, which indicates a correct valuation of HALO.
HALO's Price/Earnings ratio is rather cheap when compared to the industry. HALO is cheaper than 97.68% of the companies in the same industry.
HALO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.68.
The Price/Forward Earnings ratio is 9.28, which indicates a very decent valuation of HALO.
98.04% of the companies in the same industry are more expensive than HALO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HALO to the average of the S&P500 Index (23.58), we can say HALO is valued rather cheaply.
Industry RankSector Rank
PE 12.07
Fwd PE 9.28

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HALO indicates a rather cheap valuation: HALO is cheaper than 96.97% of the companies listed in the same industry.
97.15% of the companies in the same industry are more expensive than HALO, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 14.82
EV/EBITDA 11.01

4.3 Compensation for Growth

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 HALO may justify a higher PE ratio.
A more expensive valuation may be justified as HALO's earnings are expected to grow with 32.04% in the coming years.
PEG (NY)0.23
PEG (5Y)N/A
EPS Next 2Y33.21%
EPS Next 3Y32.04%

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0

5. Dividend

5.1 Amount

No dividends for HALO!.
Industry RankSector Rank
Dividend Yield N/A

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