INCYTE CORP (NASDAQ:INCY) – A Biopharmaceutical Stock with Attractive Valuation

INCYTE CORP (NASDAQ:INCY) stands out as a potential opportunity for value investors, according to our fundamental screening criteria. The biopharmaceutical company combines reasonable growth prospects with strong profitability and financial health, all while trading at a valuation that appears favorable compared to industry peers.

Valuation Highlights

• Price/Earnings & Forward P/E: INCY trades at a P/E of 37.28, which may seem high at first glance. However, relative to its biotechnology industry peers, it is cheaper than 93% of competitors. Its forward P/E of 9.83 is particularly compelling, well below both the S&P 500 average (21.76) and the industry (100.89).
• Enterprise Value/EBITDA & Price/FCF: The company’s valuation multiples indicate it is priced attractively, ranking cheaper than 92-93% of its sector.
• PEG Ratio: A low PEG ratio suggests that INCY’s earnings growth potential is not fully reflected in its current valuation.

Financial Health & Profitability

• Strong Balance Sheet: INCY has minimal debt, with a Debt/Equity ratio of just 0.01, indicating low financial risk. Its Altman-Z score (4.98) further confirms financial stability.
• High Margins: The company maintains an impressive Gross Margin of 93.19%, outperforming nearly 94% of its industry. Its Operating Margin (5.39%) and Profit Margin (0.48%) also rank well above average.
• ROIC & ROE: INCY’s Return on Invested Capital (4.67%) and Return on Equity (0.58%) are strong relative to peers, reinforcing efficient capital use.

Growth Considerations

• Revenue Growth: Over the past year, revenue grew by 17.13%, with a five-year average growth rate of 14.46%. However, future revenue is expected to decline slightly (-0.42% annually).
• Earnings Outlook: Despite recent EPS declines, analysts project a rebound with 26.71% annual earnings growth ahead.

For a deeper dive into INCY’s fundamentals, review the full fundamental report here.

Our Decent Value Stock Screener lists more stocks with similar characteristics and is updated regularly.

Disclaimer

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