Overall ALKS gets a fundamental rating of 6 out of 10. We evaluated ALKS against 524 industry peers in the Biotechnology industry. ALKS gets an excellent profitability rating and is at the same time showing great financial health properties. ALKS is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ALKS was profitable.
In the past year ALKS had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ALKS reported negative net income in multiple years.
ALKS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

ALKS's Return On Assets of 14.57% is amongst the best of the industry. ALKS outperforms 95.24% of its industry peers.
ALKS has a better Return On Equity (19.58%) than 96.00% of its industry peers.
ALKS has a better Return On Invested Capital (16.22%) than 96.57% of its industry peers.

		Industry Rank	Sector Rank
ROA	14.57%
ROE	19.58%
ROIC	16.22%

ROA(3y)8.82%

ROA(5y)3.68%

ROE(3y)13.16%

ROE(5y)4.95%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With an excellent Profit Margin value of 22.30%, ALKS belongs to the best of the industry, outperforming 94.48% of the companies in the same industry.
With an excellent Operating Margin value of 23.59%, ALKS belongs to the best of the industry, outperforming 95.81% of the companies in the same industry.
ALKS has a better Gross Margin (86.04%) than 88.76% of its industry peers.
In the last couple of years the Gross Margin of ALKS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	23.59%
PM (TTM)	22.3%
GM	86.04%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.43%

GM growth 5Y-0.08%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ALKS is creating value.
The number of shares outstanding for ALKS has been reduced compared to 1 year ago.
Compared to 5 years ago, ALKS has more shares outstanding
There is no outstanding debt for ALKS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 6.98 indicates that ALKS is not in any danger for bankruptcy at the moment.
ALKS's Altman-Z score of 6.98 is fine compared to the rest of the industry. ALKS outperforms 77.71% of its industry peers.
ALKS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	6.98

ROIC/WACC2.08

WACC7.8%

2.3 Liquidity

A Current Ratio of 3.67 indicates that ALKS has no problem at all paying its short term obligations.
ALKS has a Current ratio of 3.67. This is comparable to the rest of the industry: ALKS outperforms 44.76% of its industry peers.
A Quick Ratio of 3.27 indicates that ALKS has no problem at all paying its short term obligations.
The Quick ratio of ALKS (3.27) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	3.67
Quick Ratio	3.27

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ALKS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.71%, which is quite good.
The Earnings Per Share has been growing by 32.50% on average over the past years. This is a very strong growth
Looking at the last year, ALKS shows a small growth in Revenue. The Revenue has grown by 1.08% in the last year.
Measured over the past years, ALKS shows a small growth in Revenue. The Revenue has been growing by 5.87% on average per year.

EPS 1Y (TTM)19.71%

EPS 3Y54.92%

EPS 5Y32.5%

EPS Q2Q%-31.94%

Revenue 1Y (TTM)1.08%

Revenue growth 3Y9.89%

Revenue growth 5Y5.87%

Sales Q2Q%4.24%

3.2 Future

Based on estimates for the next years, ALKS will show a decrease in Earnings Per Share. The EPS will decrease by -1.55% on average per year.
ALKS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.72% yearly.

EPS Next Y-48.21%

EPS Next 2Y-28.59%

EPS Next 3Y-19.34%

EPS Next 5Y-1.55%

Revenue Next Year-2.47%

Revenue Next 2Y9.45%

Revenue Next 3Y6.91%

Revenue Next 5Y7.72%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 13.67 indicates a correct valuation of ALKS.
Based on the Price/Earnings ratio, ALKS is valued cheaper than 97.14% of the companies in the same industry.
ALKS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.32.
The Price/Forward Earnings ratio is 22.91, which indicates a rather expensive current valuation of ALKS.
92.95% of the companies in the same industry are more expensive than ALKS, based on the Price/Forward Earnings ratio.
ALKS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	13.67
Fwd PE	22.91

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ALKS is valued cheaper than 97.14% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALKS is valued cheaper than 98.29% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	11.39
EV/EBITDA	10.25

4.3 Compensation for Growth

The decent profitability rating of ALKS may justify a higher PE ratio.
A cheap valuation may be justified as ALKS's earnings are expected to decrease with -19.34% in the coming years.