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

JAZZ PHARMACEUTICALS PLC (NASDAQ:JAZZ) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company shows a strong valuation score while maintaining decent profitability, financial health, and growth metrics. Below, we examine why JAZZ stands out.

Valuation – Attractively Priced

JAZZ scores an 8 out of 10 on valuation, indicating it trades at a discount relative to its fundamentals. Key points include:

• Low P/E Ratio: At 5.42, JAZZ’s P/E is significantly below both the industry average (20.04) and the S&P500 (27.45).
• Cheaper Than Peers: 96.9% of pharmaceutical industry peers have higher P/E ratios.
• Forward P/E of 4.98 reinforces the stock’s undervaluation.

Profitability – Strong Margins

With a profitability rating of 7, JAZZ demonstrates solid earnings power:

• High Gross Margin (88.81%), outperforming 92.3% of industry competitors.
• Operating Margin (14.63%) ranks better than 84.6% of peers.
• Return on Equity (11.55%) is above 87.7% of the sector.

Financial Health – Some Risks, But Manageable

JAZZ’s health score of 5 reflects mixed financial stability:

• Liquidity is strong, with a Current Ratio of 3.38 and Quick Ratio of 2.97.
• Debt concerns exist, including a high Debt/Equity ratio (1.28), though it remains better than 74.4% of peers.
• Positive cash flow generation helps offset leverage risks.

Growth – Steady but Not Spectacular

Growth scores a 4, with moderate expansion:

• Revenue grew 13.48% annually over the past five years.
• EPS increased 18.42% YoY, though future growth is expected to slow slightly.

Our Decent Value Stock Screener lists more stocks with similar characteristics.
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 conduct your own analysis before making investment decisions.