ACADIA PHARMACEUTICALS INC (NASDAQ:ACAD) - A Promising Growth Stock at a Reasonable Valuation

ACADIA PHARMACEUTICALS INC (NASDAQ:ACAD) was identified as an affordable growth candidate by our stock screener. The company, which focuses on treatments for central nervous system disorders, demonstrates strong growth potential while maintaining reasonable valuation metrics. Its financial health and profitability also appear solid, making it a noteworthy consideration for investors seeking growth at a sensible price.

Growth Prospects

ACADIA PHARMACEUTICALS has shown impressive growth in key financial metrics:

• Earnings Per Share (EPS) surged by 5,000% over the past year.
• Revenue growth reached 22.39% in the last year and has averaged 23.08% annually over recent years.
• Analysts expect EPS growth of 44.65% annually in the coming years, with revenue projected to rise by 10.99% per year.

These figures indicate a company expanding rapidly in its sector, supported by a robust pipeline of treatments for conditions like Parkinson’s disease psychosis and Rett syndrome.

Valuation Assessment

Despite its growth, ACADIA PHARMACEUTICALS remains reasonably priced relative to its industry:

• The Price/Earnings (P/E) ratio of 42.76 appears high in absolute terms but is cheaper than 92.97% of biotechnology peers.
• The Enterprise Value to EBITDA ratio suggests the stock is undervalued compared to 92.25% of industry competitors.
• The Price/Forward Earnings ratio of 23.73 is in line with the S&P 500 average, reinforcing its reasonable valuation.

Financial Health and Profitability

The company maintains a strong balance sheet:

• No outstanding debt, placing it among the best in its industry for financial stability.
• Return on Equity (29.93%) and Return on Assets (20.23%) outperform most biotechnology peers.
• Profit margins are strong, with a gross margin of 92.08% and an operating margin of 8.84%, both ranking near the top of the sector.

While profitability has been inconsistent in past years, recent improvements suggest a positive trend.

Our Affordable Growth screener lists more stocks with similar characteristics and is updated daily.
For a deeper analysis, review the full fundamental report on ACADIA PHARMACEUTICALS.

Disclaimer

This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.