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

Overall HALO gets a fundamental rating of 7 out of 10. We evaluated HALO against 581 industry peers in the Biotechnology industry. Both the health and profitability get an excellent rating, making HALO a very profitable company, without any liquidiy or solvency issues. HALO is growing strongly while it also seems undervalued. This is an interesting combination These ratings would make HALO suitable for value and growth and quality investing!



7

1. Profitability

1.1 Basic Checks

HALO had positive earnings in the past year.
HALO had a positive operating cash flow in the past year.
Of the past 5 years HALO 4 years were profitable.
HALO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

HALO has a better Return On Assets (17.31%) than 98.62% of its industry peers.
HALO has a Return On Equity of 179.30%. This is amongst the best in the industry. HALO outperforms 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 18.09%, HALO belongs to the best of the industry, outperforming 98.10% 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 14.58%.
The 3 year average ROIC (17.78%) for HALO is below the current ROIC(18.09%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 17.31%
ROE 179.3%
ROIC 18.09%
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 36.95%. This is amongst the best in the industry. HALO outperforms 98.96% of its industry peers.
HALO's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 44.25%, HALO belongs to the best of the industry, outperforming 99.48% of the companies in the same industry.
In the last couple of years the Operating Margin of HALO has declined.
Looking at the Gross Margin, with a value of 78.51%, HALO belongs to the top of the industry, outperforming 86.87% of the companies in the same industry.
HALO's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 44.25%
PM (TTM) 36.95%
GM 78.51%
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

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HALO is creating value.
Compared to 1 year ago, HALO has less shares outstanding
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

An Altman-Z score of 3.75 indicates that HALO is not in any danger for bankruptcy at the moment.
The Altman-Z score of HALO (3.75) is better than 76.34% of its industry peers.
HALO has a debt to FCF ratio of 3.54. This is a good value and a sign of high solvency as HALO would need 3.54 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.54, HALO belongs to the top of the industry, outperforming 95.68% of the companies in the same industry.
HALO has a Debt/Equity ratio of 8.44. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of HALO (8.44) is worse than 84.63% of its industry peers.
Industry RankSector Rank
Debt/Equity 8.44
Debt/FCF 3.54
Altman-Z 3.75
ROIC/WACC2.45
WACC7.39%

2.3 Liquidity

HALO has a Current Ratio of 6.64. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of HALO (6.64) is better than 63.56% of its industry peers.
HALO has a Quick Ratio of 5.36. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
HALO has a Quick ratio of 5.36. This is comparable to the rest of the industry: HALO outperforms 55.09% of its industry peers.
Industry RankSector Rank
Current Ratio 6.64
Quick Ratio 5.36

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9

3. Growth

3.1 Past

HALO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.64%, which is quite impressive.
The Earnings Per Share has been growing by 45.64% on average over the past years. This is a very strong growth
HALO shows a strong growth in Revenue. In the last year, the Revenue has grown by 22.40%.
HALO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 40.42% yearly.
EPS 1Y (TTM)39.64%
EPS 3Y45.64%
EPS 5YN/A
EPS Q2Q%68.09%
Revenue 1Y (TTM)22.4%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Sales Q2Q%20.81%

3.2 Future

The Earnings Per Share is expected to grow by 22.93% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 13.80% on average over the next years. This is quite good.
EPS Next Y36.71%
EPS Next 2Y28.89%
EPS Next 3Y30.02%
EPS Next 5Y22.93%
Revenue Next Year14.05%
Revenue Next 2Y14.25%
Revenue Next 3Y16.48%
Revenue Next 5Y13.8%

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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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9

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.29, which indicates a correct valuation of HALO.
Compared to the rest of the industry, the Price/Earnings ratio of HALO indicates a rather cheap valuation: HALO is cheaper than 97.58% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of HALO to the average of the S&P500 Index (28.05), we can say HALO is valued slightly cheaper.
HALO is valuated reasonably with a Price/Forward Earnings ratio of 9.59.
97.75% of the companies in the same industry are more expensive than HALO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.07. HALO is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 14.29
Fwd PE 9.59

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HALO is valued cheaply inside the industry as 96.89% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HALO is valued cheaply inside the industry as 98.62% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 13.31
EV/EBITDA 13.41

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 30.02% in the coming years.
PEG (NY)0.39
PEG (5Y)N/A
EPS Next 2Y28.89%
EPS Next 3Y30.02%

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0

5. Dividend

5.1 Amount

HALO does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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