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 586 industry peers in the Biotechnology industry. HALO gets an excellent profitability rating and is at the same time showing great financial health properties. An interesting combination arises when we look at growth and value: HALO is growing strongly while it also seems undervalued. These ratings would make HALO suitable 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

Looking at the Return On Assets, with a value of 17.31%, HALO belongs to the top of the industry, outperforming 98.80% of the companies in the same industry.
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 98.46% of the companies in the same industry.
HALO had an Average Return On Invested Capital over the past 3 years of 17.78%. This is above the industry average of 14.94%.
The last Return On Invested Capital (18.09%) for HALO is above the 3 year average (17.78%), which is a sign of increasing profitability.
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 better Profit Margin (36.95%) than 98.97% of its industry peers.
In the last couple of years the Profit Margin of HALO has declined.
With an excellent Operating Margin value of 44.25%, HALO belongs to the best of the industry, outperforming 99.49% of the companies in the same industry.
HALO's Operating Margin has declined in the last couple of years.
HALO has a Gross Margin of 78.51%. This is amongst the best in the industry. HALO outperforms 87.18% of its industry peers.
In the last couple of years the Gross Margin of HALO has declined.
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

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

2.2 Solvency

An Altman-Z score of 3.81 indicates that HALO is not in any danger for bankruptcy at the moment.
HALO's Altman-Z score of 3.81 is fine compared to the rest of the industry. HALO outperforms 75.90% 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.
With an excellent Debt to FCF ratio value of 3.54, HALO belongs to the best of the industry, outperforming 95.73% 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.
HALO's Debt to Equity ratio of 8.44 is on the low side compared to the rest of the industry. HALO is outperformed by 84.96% of its industry peers.
Industry RankSector Rank
Debt/Equity 8.44
Debt/FCF 3.54
Altman-Z 3.81
ROIC/WACC2.49
WACC7.26%

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.
HALO's Current ratio of 6.64 is fine compared to the rest of the industry. HALO outperforms 63.93% 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.
The Quick ratio of HALO (5.36) is comparable to the rest of the industry.
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
Looking at the last year, HALO shows a very strong growth in Revenue. 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 growth Q2Q68.09%
Revenue 1Y (TTM)22.4%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Revenue growth Q2Q20.81%

3.2 Future

Based on estimates for the next years, HALO will show a very strong growth in Earnings Per Share. The EPS will grow by 22.93% on average per year.
Based on estimates for the next years, HALO will show a quite strong growth in Revenue. The Revenue will grow by 13.80% on average per year.
EPS Next Y35.27%
EPS Next 2Y29.38%
EPS Next 3Y30.48%
EPS Next 5Y22.93%
Revenue Next Year14.89%
Revenue Next 2Y14.25%
Revenue Next 3Y16.45%
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.
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

Based on the Price/Earnings ratio of 14.42, the valuation of HALO can be described as correct.
Based on the Price/Earnings ratio, HALO is valued cheaply inside the industry as 97.78% of the companies are valued more expensively.
HALO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.60.
The Price/Forward Earnings ratio is 9.61, which indicates a very decent valuation of HALO.
HALO's Price/Forward Earnings ratio is rather cheap when compared to the industry. HALO is cheaper than 98.12% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.15. HALO is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 14.42
Fwd PE 9.61

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 96.92% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, HALO is valued cheaper than 98.63% of the companies in the same industry.
Industry RankSector Rank
P/FCF 13.41
EV/EBITDA 13.76

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.
HALO's earnings are expected to grow with 30.48% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.41
PEG (5Y)N/A
EPS Next 2Y29.38%
EPS Next 3Y30.48%

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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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