INCYTE CORP (NASDAQ:INCY) – A Potential Undervalued Opportunity in Biotech

Last update:

INCYTE CORP (NASDAQ:INCY) has been identified as a potential value stock through our fundamental screening process. The biopharmaceutical company shows a strong valuation score while maintaining solid profitability and financial health, making it an interesting candidate for value investors.

Valuation: Attractively Priced

INCY scores an 8/10 in valuation, indicating it may be trading below its intrinsic value. Key highlights:

Forward P/E of 8.43 – significantly lower than both the industry average (42.49) and the S&P 500 (20.44).
Enterprise Value/EBITDA and Price/Free Cash Flow ratios are cheaper than 93% of industry peers.
Despite a trailing P/E of 32.05, earnings are expected to grow by 25.93% annually, suggesting future upside.

Profitability: Strong Margins

With a profitability rating of 7/10, INCY demonstrates solid financial performance:

Gross Margin of 93.20%, outperforming 93% of biotech peers.
Operating Margin of 2.63% and ROIC of 2.32%, both ranking in the top 10% of the industry.
Recent earnings declines (-51.45% YoY) are offset by strong revenue growth (17.13% YoY).

Financial Health: Stable Foundation

The company holds a 6/10 health rating, supported by:

Low debt (Debt/Equity of 0.01) and a strong Altman-Z score of 4.40, indicating low bankruptcy risk.
Debt/FCF ratio of 0.15, meaning INCY could repay debt in just 0.15 years—better than 96% of competitors.
Liquidity metrics (Current Ratio: 1.97) are adequate but slightly below industry averages.

Growth: Mixed but Improving

Growth scores 4/10, with some positive trends:

Revenue has grown 14.46% annually over the past years.
Future EPS growth is projected at 25.93%, signaling a potential turnaround from recent declines.

Our Decent Value Stocks screener lists more stocks with similar characteristics. For a deeper dive, review the full fundamental report on INCY.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.