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Investors should take notice of NASDAQ:ALKS—it offers a great deal for the fundamentals it presents.

By Mill Chart

Last update: Apr 17, 2024

Our stock screening tool has identified ALKERMES PLC (NASDAQ:ALKS) as an undervalued gem with strong fundamentals. NASDAQ:ALKS boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Deciphering NASDAQ:ALKS's Valuation Rating

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:ALKS was assigned a score of 8 for valuation:

  • ALKS's Price/Earnings ratio is rather cheap when compared to the industry. ALKS is cheaper than 97.09% of the companies in the same industry.
  • ALKS is valuated rather cheaply when we compare the Price/Earnings ratio to 24.93, which is the current average of the S&P500 Index.
  • A Price/Forward Earnings ratio of 8.34 indicates a reasonable valuation of ALKS.
  • 99.15% of the companies in the same industry are more expensive than ALKS, based on the Price/Forward Earnings ratio.
  • ALKS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.41.
  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 98.29% of the companies listed in the same industry.
  • Based on the Price/Free Cash Flow ratio, ALKS is valued cheaply inside the industry as 98.97% of the companies are valued more expensively.
  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • ALKS has a very decent profitability rating, which may justify a higher PE ratio.
  • ALKS's earnings are expected to grow with 25.25% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NASDAQ:ALKS

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:ALKS has achieved a 6:

  • ALKS has a Return On Assets of 16.66%. This is amongst the best in the industry. ALKS outperforms 99.15% of its industry peers.
  • ALKS has a Return On Equity of 29.59%. This is amongst the best in the industry. ALKS outperforms 98.29% of its industry peers.
  • With an excellent Return On Invested Capital value of 20.54%, ALKS belongs to the best of the industry, outperforming 99.32% of the companies in the same industry.
  • The Profit Margin of ALKS (21.39%) is better than 97.78% of its industry peers.
  • The Operating Margin of ALKS (25.25%) is better than 97.78% of its industry peers.
  • ALKS has a better Gross Margin (84.78%) than 89.57% of its industry peers.

Unpacking NASDAQ:ALKS's Health Rating

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ALKS, the assigned 7 reflects its health status:

  • ALKS has an Altman-Z score of 3.64. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.
  • ALKS's Altman-Z score of 3.64 is fine compared to the rest of the industry. ALKS outperforms 76.92% of its industry peers.
  • ALKS has a debt to FCF ratio of 0.82. This is a very positive value and a sign of high solvency as it would only need 0.82 years to pay back of all of its debts.
  • ALKS's Debt to FCF ratio of 0.82 is amongst the best of the industry. ALKS outperforms 96.41% of its industry peers.
  • A Debt/Equity ratio of 0.24 indicates that ALKS is not too dependend on debt financing.
  • Although ALKS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
  • ALKS has a Current Ratio of 2.86. This indicates that ALKS is financially healthy and has no problem in meeting its short term obligations.
  • A Quick Ratio of 2.50 indicates that ALKS has no problem at all paying its short term obligations.

Understanding NASDAQ:ALKS's Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:ALKS has earned a 6 for growth:

  • ALKS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 317.65%, which is quite impressive.
  • ALKS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.41% yearly.
  • ALKS shows a strong growth in Revenue. In the last year, the Revenue has grown by 49.61%.
  • Measured over the past years, ALKS shows a quite strong growth in Revenue. The Revenue has been growing by 8.74% on average per year.
  • Based on estimates for the next years, ALKS will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.76% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of ALKS

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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ALKERMES PLC

NASDAQ:ALKS (5/24/2024, 7:13:31 PM)

After market: 24.02 0 (0%)

24.02

+0.02 (+0.08%)

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