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

JAZZ PHARMACEUTICALS PLC (NASDAQ:JAZZ) stands out as an undervalued stock with solid fundamentals, according to our Decent Value screener. The company combines an attractive valuation with decent profitability, financial health, and growth potential, making it a candidate for value investors.

Key Strengths

Valuation (Rating: 8/10)

• JAZZ trades at a Price/Earnings (P/E) ratio of 5.46, significantly lower than both the industry average (22.42) and the S&P 500 (26.60).
• The Forward P/E of 5.04 suggests continued undervaluation, with 94% of industry peers priced higher.
• The Enterprise Value to EBITDA ratio also indicates a cheap valuation, outperforming 91% of competitors.

Profitability (Rating: 7/10)

• Strong Profit Margin (11.86%) and Operating Margin (14.63%), ranking in the top 15% of the pharmaceuticals industry.
• High Gross Margin (88.81%), reflecting efficient cost management.
• Solid Return on Equity (11.55%), outperforming 88% of peers.

Financial Health (Rating: 5/10)

• Current Ratio (3.38) and Quick Ratio (2.97) indicate good short-term liquidity.
• Debt/Equity ratio (1.28) is elevated but manageable, with a Debt to FCF ratio (3.61) suggesting reasonable repayment capacity.
• The Altman-Z score (1.50) signals some financial risk but remains better than 63% of industry peers.

Growth (Rating: 4/10)

• Revenue growth (13.48% CAGR over past years) shows steady expansion.
• EPS growth (18.42% YoY) reflects improving profitability.
• Future EPS growth (6.02% expected annually) remains positive, though modest.

Considerations

While JAZZ presents an attractive valuation, investors should note:

• Declining margins in recent years.
• Moderate future growth projections compared to past performance.
• Higher debt levels than some peers.

For a deeper dive, review the full fundamental analysis report.

Our Decent Value screener lists more stocks with strong valuations and solid fundamentals, updated daily.

Disclaimer

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