Jazz Pharmaceuticals PLC (NASDAQ:JAZZ) – An Undervalued Biopharmaceutical Stock Worth Watching

Jazz Pharmaceuticals PLC (NASDAQ:JAZZ) stands out as a potential opportunity for value investors, according to our fundamental screening criteria. The company, which specializes in treatments for narcolepsy, oncology, and rare diseases, shows a strong valuation profile while maintaining reasonable profitability, financial health, and growth metrics.

Key Strengths

• Attractive Valuation: JAZZ scores an 8 out of 10 in valuation, indicating it trades at a discount compared to peers. The stock has a P/E ratio of just 5.36, significantly lower than the industry average of 18.88 and the S&P 500’s 26.03. Its forward P/E of 4.95 further reinforces its cheap valuation.
• Solid Profitability: With a profitability rating of 7, JAZZ maintains strong margins, including an 11.86% net profit margin and an 88.81% gross margin—both ranking in the top tier of its industry.
• Reasonable Financial Health: The company scores a 5 in financial health, supported by a healthy current ratio of 3.38 and manageable debt levels relative to free cash flow. However, investors should note its elevated debt-to-equity ratio of 1.28.
• Moderate Growth: While not a high-growth stock, JAZZ has delivered steady revenue expansion, averaging 13.48% over recent years, with earnings per share growing by 18.42% in the past year.

Considerations

Despite its strengths, JAZZ has some risks, including a declining operating margin and a high reliance on external financing. Additionally, its Altman-Z score of 1.49 suggests some financial risk, though this is not uncommon in the biopharmaceutical sector.

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For a deeper dive, review the full fundamental report on JAZZ.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.