INCYTE CORP (NASDAQ:INCY) is probably undervalued for the fundamentals it is displaying.

INCYTE CORP (NASDAQ:INCY) was identified as a decent value stock by our stock screener. INCY 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: INCY

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of INCY, the assigned 8 reflects its valuation:

• Based on the Price/Earnings ratio, INCY is valued cheaply inside the industry as 93.31% of the companies are valued more expensively.
• INCY is valuated reasonably with a Price/Forward Earnings ratio of 9.95.
• Based on the Price/Forward Earnings ratio, INCY is valued cheaper than 97.18% of the companies in the same industry.
• INCY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.37.
• Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaply inside the industry as 93.31% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, INCY is valued cheaply inside the industry as 93.66% 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.
• The decent profitability rating of INCY may justify a higher PE ratio.
• A more expensive valuation may be justified as INCY's earnings are expected to grow with 88.20% in the coming years.

How do we evaluate the Profitability for INCY?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of INCY, the assigned 7 is noteworthy for profitability:

• INCY's Return On Assets of 0.60% is amongst the best of the industry. INCY outperforms 91.02% of its industry peers.
• Looking at the Return On Equity, with a value of 0.95%, INCY belongs to the top of the industry, outperforming 91.90% of the companies in the same industry.
• INCY has a better Return On Invested Capital (2.32%) than 92.78% of its industry peers.
• The 3 year average ROIC (7.24%) for INCY is well above the current ROIC(2.32%). The reason for the recent decline needs to be investigated.
• INCY's Profit Margin of 0.77% is amongst the best of the industry. INCY outperforms 91.73% of its industry peers.
• The Operating Margin of INCY (2.63%) is better than 92.78% of its industry peers.
• INCY has a better Gross Margin (93.20%) than 93.13% of its industry peers.

Exploring INCY's Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. INCY has earned a 6 out of 10:

• An Altman-Z score of 4.37 indicates that INCY is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 4.37, INCY belongs to the best of the industry, outperforming 80.46% of the companies in the same industry.
• The Debt to FCF ratio of INCY is 0.15, which is an excellent value as it means it would take INCY, only 0.15 years of fcf income to pay off all of its debts.
• INCY has a Debt to FCF ratio of 0.15. This is amongst the best in the industry. INCY outperforms 96.83% of its industry peers.
• A Debt/Equity ratio of 0.01 indicates that INCY is not too dependend on debt financing.

What does the Growth looks like for INCY

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. INCY scores a 4 out of 10:

• Looking at the last year, INCY shows a quite strong growth in Revenue. The Revenue has grown by 14.76% in the last year.
• INCY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.46% yearly.
• INCY is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.93% yearly.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

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

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

Keep in mind

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.