ACADIA PHARMACEUTICALS INC (NASDAQ:ACAD) Emerges as a Top Affordable Growth Stock

In the search for growth stocks that do not have high price tags, many investors use the "Affordable Growth" method. This method looks for firms showing good expansion numbers while keeping fair prices, good earnings, and sound finances, essentially looking for growth without a high cost instead of following expensive popular names. By filtering for stocks with growth grades over 7, price grades over 5, and sufficient grades in earnings and soundness, investors can find firms set for continued expansion without paying high multiples.

Growth Path and Movement

ACADIA PHARMACEUTICALS INC (NASDAQ:ACAD) shows good growth traits that fit well with the affordable growth method. The firm's basic study shows large expansion in important measures:

• Revenue increase of 14.41% over the last year, with a notable 23.08% average yearly growth rate over several years
• Earnings per share rising by 150.00% in the most recent year
• Expected EPS increase of 41.29% each year in future years, along with expected revenue growth of 11.25% per year

These growth numbers are much higher than industry norms and support the firm's place in growth-focused portfolios. The steady expansion in both revenue and earnings shows a firm effectively growing its activities while keeping operational effectiveness.

Price Assessment

Even with its good growth picture, ACADIA keeps fair price measures compared to industry rivals:

• P/E ratio of 56.13, which makes it less expensive than 91.31% of biotechnology industry firms
• Forward P/E ratio of 29.24, much lower than the industry average of 72.28
• Enterprise Value to EBITDA and Price/Free Cash Flow ratios both rank less expensive than about 93% of industry peers

While the absolute P/E ratio might seem high compared to the wider market, within the high-growth biotechnology field, these price measures show a fair premium for ACADIA's growth outlook. The price grade of 5 shows this balance between growth potential and current cost.

Financial Soundness and Earnings

The firm's financial soundness grade of 7 shows a stable base supporting its growth goals:

• No existing debt, putting it among the best in the industry for debt handling
• Altman-Z score of 5.57 shows no bankruptcy worries
• Current ratio of 2.91 and quick ratio of 2.83 show good short-term cash availability

Earnings measures show notable improvement, with a grade of 6 reflecting the firm's move toward sustainable profits:

• Return on Assets of 18.13% does better than 96.49% of industry peers
• Return on Equity of 27.01% is higher than 97.04% of rivals
• Profit margin of 21.80% ranks in the top 5% of the biotechnology industry

These soundness and earnings factors give key support for the growth story, making sure the firm has the financial stability to keep putting money into research and development while growing commercial activities.

Investment Points

The mix of good growth numbers, fair field-relative price, improving earnings, and sound financial health makes ACADIA a notable option for investors looking for affordable growth chances. The firm's focus on central nervous system issues and rare diseases meets important unmet medical needs, giving potential for continued growth beyond current product lines.

While the firm does not pay dividends, which is common for growth-phase biotechnology companies, it puts cash flow back into further work on its pipeline, including NUPLAZID for Parkinson's disease psychosis and DAYBUE for Rett syndrome treatment.

For investors wanting to look at similar affordable growth chances, more filtering results can be found through our Affordable Growth Stock Screener. This tool allows more study of firms meeting similar growth-with-fair-price rules across different fields and market sizes.

Disclaimer: This study is given for information only and does not make up investment advice, suggestion, or support of any security. Investors should do their own research and talk with a qualified financial advisor before making investment choices. Past results do not ensure future outcomes, and investing in stocks includes risk of loss.