AMPHASTAR PHARMACEUTICALS INC (NASDAQ:AMPH) – A Potentially Undervalued Stock Worth Watching

AMPH ASTAR PHARMACEUTICALS INC (NASDAQ:AMPH) was identified by our Decent Value stock screener as a company with strong fundamentals and an attractive valuation. The stock combines solid profitability and financial health with a low valuation, making it a candidate for value investors. Below, we break down the key aspects of its fundamental profile.

Valuation

AMPH stands out with a Valuation Rating of 8/10, indicating it is priced attractively relative to its fundamentals. Key highlights include:

• A P/E ratio of 6.98, well below the industry average of 20.24 and the S&P 500 average of 25.25.
• A Price/Forward Earnings ratio of 6.59, cheaper than 93.94% of its pharmaceutical peers.
• An Enterprise Value/EBITDA and Price/Free Cash Flow that place it in the bottom 6.57% of the industry in terms of valuation.

Profitability

The company earns a Profitability Rating of 8/10, supported by strong margins and returns:

• Return on Assets (10.11%) and Return on Equity (21.78%) rank in the top 7-8% of the industry.
• Operating Margin of 28.06% outperforms 92.93% of competitors.
• Profit Margin of 21.79% has improved in recent years and is among the best in the sector.

Financial Health

With a Health Rating of 6/10, AMPH maintains a stable financial position:

• Current Ratio of 3.07 and Quick Ratio of 2.19 indicate strong short-term liquidity.
• Debt/FCF ratio of 3.49 suggests manageable debt levels, better than 88.38% of peers.
• An Altman-Z score of 2.49 signals limited bankruptcy risk, though slightly below ideal thresholds.

Growth

While growth is more moderate, AMPH still holds a Growth Rating of 4/10:

• Revenue growth of 13.59% (past year) and 17.82% (5-year average) is solid.
• EPS growth of 61.62% over the past 5 years is strong, though recent yearly EPS declined by 4.30%.
• Future revenue is expected to grow at 3.43% annually, while EPS may dip slightly (-0.40%).

For a deeper look at the numbers, review the full fundamental report for AMPH.

Our Decent Value screener lists more stocks with strong valuations and solid fundamentals, updated daily.

Disclaimer

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