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NASDAQ:HRMY, an undervalued stock with good fundamentals.

By Mill Chart

Last update: Dec 13, 2023

HARMONY BIOSCIENCES HOLDINGS (NASDAQ:HRMY) was identified as a decent value stock by our stock screener. NASDAQ:HRMY scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Evaluating Valuation: NASDAQ:HRMY

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:HRMY has earned a 8 for valuation:

  • The Price/Earnings ratio is 11.50, which indicates a very decent valuation of HRMY.
  • 87.68% of the companies in the same industry are more expensive than HRMY, based on the Price/Earnings ratio.
  • When comparing the Price/Earnings ratio of HRMY to the average of the S&P500 Index (24.87), we can say HRMY is valued rather cheaply.
  • HRMY is valuated reasonably with a Price/Forward Earnings ratio of 8.90.
  • 92.12% of the companies in the same industry are more expensive than HRMY, based on the Price/Forward Earnings ratio.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 20.46, HRMY is valued rather cheaply.
  • 92.12% of the companies in the same industry are more expensive than HRMY, based on the Enterprise Value to EBITDA ratio.
  • 90.64% of the companies in the same industry are more expensive than HRMY, based on the Price/Free Cash Flow ratio.
  • HRMY has a very decent profitability rating, which may justify a higher PE ratio.
  • A more expensive valuation may be justified as HRMY's earnings are expected to grow with 13.43% in the coming years.

Evaluating Profitability: NASDAQ:HRMY

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:HRMY was assigned a score of 7 for profitability:

  • HRMY's Return On Assets of 19.39% is amongst the best of the industry. HRMY outperforms 96.55% of its industry peers.
  • HRMY's Return On Equity of 31.33% is amongst the best of the industry. HRMY outperforms 94.58% of its industry peers.
  • HRMY has a Return On Invested Capital of 23.67%. This is amongst the best in the industry. HRMY outperforms 96.55% of its industry peers.
  • The 3 year average ROIC (12.91%) for HRMY is below the current ROIC(23.67%), indicating increased profibility in the last year.
  • HRMY's Profit Margin of 27.83% is amongst the best of the industry. HRMY outperforms 96.55% of its industry peers.
  • The Operating Margin of HRMY (36.80%) is better than 97.04% of its industry peers.
  • HRMY's Gross Margin of 80.62% is amongst the best of the industry. HRMY outperforms 84.73% of its industry peers.
  • HRMY's Gross Margin has improved in the last couple of years.

Deciphering NASDAQ:HRMY's Health Rating

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:HRMY has achieved a 8 out of 10:

  • An Altman-Z score of 5.54 indicates that HRMY is not in any danger for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 5.54, HRMY belongs to the top of the industry, outperforming 83.25% of the companies in the same industry.
  • HRMY has a debt to FCF ratio of 1.16. This is a very positive value and a sign of high solvency as it would only need 1.16 years to pay back of all of its debts.
  • HRMY's Debt to FCF ratio of 1.16 is amongst the best of the industry. HRMY outperforms 93.10% of its industry peers.
  • A Debt/Equity ratio of 0.38 indicates that HRMY is not too dependend on debt financing.
  • Even though the debt/equity ratio score it not favorable for HRMY, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
  • HRMY has a Current Ratio of 4.12. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.
  • HRMY has a Quick Ratio of 4.07. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.

Assessing Growth for NASDAQ:HRMY

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:HRMY, the assigned 7 reflects its growth potential:

  • Looking at the last year, HRMY shows a very strong growth in Revenue. The Revenue has grown by 35.24%.
  • The Revenue has been growing by 317.90% on average over the past years. This is a very strong growth!
  • HRMY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.65% yearly.
  • Based on estimates for the next years, HRMY will show a very strong growth in Revenue. The Revenue will grow by 22.05% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of HRMY contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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HARMONY BIOSCIENCES HOLDINGS

NASDAQ:HRMY (6/14/2024, 7:14:27 PM)

After market: 29.05 0 (0%)

29.05

-0.71 (-2.39%)

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