TARO PHARMACEUTICAL INDUS(NYSE:TARO) stock Fundamental Analysis

Fundamental Rating

We assign a fundamental rating of 5 out of 10 to TARO. TARO was compared to 198 industry peers in the Pharmaceuticals industry. While TARO has a great health rating, its profitability is only average at the moment. TARO has a valuation in line with the averages, but it does not seem to be growing.

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1. Profitability

1.1 Basic Checks

TARO had positive earnings in the past year.

In the past year TARO had a positive cash flow from operations.

TARO had positive earnings in 4 of the past 5 years.

TARO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

The Return On Assets of TARO (2.49%) is better than 84.97% of its industry peers.

Looking at the Return On Equity, with a value of 3.00%, TARO belongs to the top of the industry, outperforming 83.94% of the companies in the same industry.

TARO's Return On Invested Capital of 0.79% is fine compared to the rest of the industry. TARO outperforms 77.20% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for TARO is significantly below the industry average of 41.77%.

		Industry Rank	Sector Rank
ROA	2.49%
ROE	3%
ROIC	0.79%

ROA(3y)2.12%

ROA(5y)0.14%

ROE(3y)2.63%

ROE(5y)-0.64%

ROIC(3y)2.06%

ROIC(5y)3.87%

1.3 Margins

TARO has a Profit Margin of 8.55%. This is amongst the best in the industry. TARO outperforms 86.53% of its industry peers.

TARO's Profit Margin has declined in the last couple of years.

The Operating Margin of TARO (3.42%) is better than 79.27% of its industry peers.

In the last couple of years the Operating Margin of TARO has declined.

TARO has a Gross Margin of 48.47%. This is in the better half of the industry: TARO outperforms 60.62% of its industry peers.

In the last couple of years the Gross Margin of TARO has declined.

		Industry Rank	Sector Rank
OM	3.42%
PM (TTM)	8.55%
GM	48.47%

OM growth 3Y-49.43%

OM growth 5Y-39.92%

PM growth 3YN/A

PM growth 5Y-27.27%

GM growth 3Y-3.56%

GM growth 5Y-6.14%

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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) below the Cost of Capital (WACC), TARO is destroying value.

TARO has about the same amout of shares outstanding than it did 1 year ago.

Compared to 5 years ago, TARO has less shares outstanding

There is no outstanding debt for TARO. 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

TARO 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	N/A

ROIC/WACC0.08

WACC9.43%

2.3 Liquidity

TARO has a Current Ratio of 3.61. This indicates that TARO is financially healthy and has no problem in meeting its short term obligations.

TARO has a Current ratio (3.61) which is comparable to the rest of the industry.

A Quick Ratio of 3.04 indicates that TARO has no problem at all paying its short term obligations.

TARO's Quick ratio of 3.04 is in line compared to the rest of the industry. TARO outperforms 51.81% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.61
Quick Ratio	3.04

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 156.72% over the past year.

TARO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -24.80% yearly.

Looking at the last year, TARO shows a quite strong growth in Revenue. The Revenue has grown by 9.81% in the last year.

The Revenue has been decreasing by -1.25% on average over the past years.

EPS 1Y (TTM)156.72%

EPS 3YN/A

EPS 5Y-24.8%

EPS Q2Q%122.22%

Revenue 1Y (TTM)9.81%

Revenue growth 3Y4.65%

Revenue growth 5Y-1.25%

Sales Q2Q%12.52%

3.2 Future

No EPS estimates are available, so we could not analyze the future EPS growth and evolution.

No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.

EPS Next YN/A

EPS Next 2YN/A

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next YearN/A

Revenue Next 2YN/A

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

No EPS estimates are available, so we could not analyze the future EPS growth and evolution.

No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 24.98, which indicates a rather expensive current valuation of TARO.

Based on the Price/Earnings ratio, TARO is valued cheaply inside the industry as 82.90% of the companies are valued more expensively.

Compared to an average S&P500 Price/Earnings ratio of 28.92, TARO is valued at the same level.

		Industry Rank	Sector Rank
PE	24.98
Fwd PE	N/A

4.2 Price Multiples

TARO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TARO is cheaper than 96.37% of the companies in the same industry.

Based on the Price/Free Cash Flow ratio, TARO is valued cheaper than 83.42% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	22.96
EV/EBITDA	5.29

4.3 Compensation for Growth

TARO has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2YN/A

EPS Next 3YN/A

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5. Dividend

5.1 Amount

No dividends for TARO!.

		Industry Rank	Sector Rank
Dividend Yield	N/A

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TARO PHARMACEUTICAL INDUS

NYSE:TARO (6/21/2024, 8:26:37 PM)

After market: 42.97 0 (0%)

42.97

0 (0%)

Chartmill FA Rating

GICS SectorHealth Care

GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences

GICS IndustryPharmaceuticals

Earnings (Last)05-20 2024-05-20/amc

Earnings (Next)07-24 2024-07-24/amc

Inst Owners1.69%

Inst Owner Change-0.03%

Ins OwnersN/A

Ins Owner ChangeN/A

Market Cap1.61B

Analysts43.33

Price Target43.86 (2.07%)

Short Float %N/A

Short RatioN/A

Dividend

		Industry Rank	Sector Rank
Dividend Yield	N/A

Yearly Dividend0

Dividend Growth(5Y)N/A

DP0%

Div Incr Years0

Div Non Decr Years0

Ex-DateN/A

Surprises & Revisions

EPS beat(2)2

Avg EPS beat(2)51.49%

Min EPS beat(2)26.5%

Max EPS beat(2)76.47%

EPS beat(4)4

Avg EPS beat(4)59.11%

Min EPS beat(4)26.5%

Max EPS beat(4)106.97%

EPS beat(8)4

Avg EPS beat(8)-3.86%

EPS beat(12)5

Avg EPS beat(12)-6.96%

EPS beat(16)6

Avg EPS beat(16)-80.87%

Revenue beat(2)1

Avg Revenue beat(2)1.54%

Min Revenue beat(2)-0.55%

Max Revenue beat(2)3.62%

Revenue beat(4)2

Avg Revenue beat(4)-0.56%

Min Revenue beat(4)-9.83%

Max Revenue beat(4)4.53%

Revenue beat(8)3

Avg Revenue beat(8)-5.15%

Revenue beat(12)4

Avg Revenue beat(12)-5.03%

Revenue beat(16)5

Avg Revenue beat(16)-5.45%

PT rev (1m)0%

PT rev (3m)0%

EPS NQ rev (1m)N/A

EPS NQ rev (3m)N/A

EPS NY rev (1m)N/A

EPS NY rev (3m)N/A

Revenue NQ rev (1m)N/A

Revenue NQ rev (3m)N/A

Revenue NY rev (1m)N/A

Revenue NY rev (3m)N/A

Valuation

		Industry Rank	Sector Rank
PE	24.98
Fwd PE	N/A
P/S	2.57
P/FCF	22.96
P/OCF	12.96
P/B	0.9
P/tB	0.91
EV/EBITDA	5.29

EPS(TTM)1.72

EY4%

EPS(NY)N/A

Fwd EYN/A

FCF(TTM)1.87

FCFY4.36%

OCF(TTM)3.31

OCFY7.71%

SpS16.74

BVpS47.71

TBVpS47.25

PEG (NY)N/A

PEG (5Y)N/A

Profitability

		Industry Rank	Sector Rank
ROA	2.49%
ROE	3%
ROCE	1.19%
ROIC	0.79%
ROICexc	1.53%
ROICexgc	1.56%
OM	3.42%
PM (TTM)	8.55%
GM	48.47%
FCFM	11.18%

ROA(3y)2.12%

ROA(5y)0.14%

ROE(3y)2.63%

ROE(5y)-0.64%

ROIC(3y)2.06%

ROIC(5y)3.87%

ROICexc(3y)3.91%

ROICexc(5y)8.26%

ROICexgc(3y)4.17%

ROICexgc(5y)8.52%

ROCE(3y)3.12%

ROCE(5y)5.88%

ROICexcg growth 3Y-51.57%

ROICexcg growth 5Y-41.36%

ROICexc growth 3Y-51.56%

ROICexc growth 5Y-41.36%

OM growth 3Y-49.43%

OM growth 5Y-39.92%

PM growth 3YN/A

PM growth 5Y-27.27%

GM growth 3Y-3.56%

GM growth 5Y-6.14%

F-Score8

Asset Turnover0.29

Health

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Debt/EBITDA	0
Cap/Depr	174.37%
Cap/Sales	8.62%
Interest Coverage	250
Cash Conversion	236.87%
Profit Quality	130.77%
Current Ratio	3.61
Quick Ratio	3.04
Altman-Z	N/A

F-Score8

WACC9.43%

ROIC/WACC0.08

Cap/Depr(3y)221.93%

Cap/Depr(5y)174.21%

Cap/Sales(3y)10.63%

Cap/Sales(5y)7.89%

Profit Quality(3y)N/A

Profit Quality(5y)N/A

High Growth Momentum

Growth

EPS 1Y (TTM)156.72%

EPS 3YN/A

EPS 5Y-24.8%

EPS Q2Q%122.22%

EPS Next YN/A

EPS Next 2YN/A

EPS Next 3YN/A

EPS Next 5YN/A

Revenue 1Y (TTM)9.81%

Revenue growth 3Y4.65%

Revenue growth 5Y-1.25%

Sales Q2Q%12.52%

Revenue Next YearN/A

Revenue Next 2YN/A

Revenue Next 3YN/A

Revenue Next 5YN/A

EBIT growth 1Y20.73%

EBIT growth 3Y-47.08%

EBIT growth 5Y-40.67%

EBIT Next YearN/A

EBIT Next 3YN/A

EBIT Next 5YN/A

FCF growth 1Y486.14%

FCF growth 3Y34.98%

FCF growth 5Y-24.83%

OCF growth 1Y291.68%

OCF growth 3Y39.58%

OCF growth 5Y-17.39%

TARO PHARMACEUTICAL INDUS (TARO) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

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