PACIRA BIOSCIENCES INC (NASDAQ:PCRX) – An Undervalued Stock with Solid Fundamentals

PACIRA BIOSCIENCES INC (NASDAQ:PCRX) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company’s fundamentals suggest a combination of reasonable valuation, stable profitability, and steady growth, making it worth a closer look.

Key Strengths of PCRX

1. Attractive Valuation

PCRX scores an 8/10 in valuation, indicating it trades at a discount relative to its fundamentals. Key highlights:

• P/E ratio of 8.12, significantly below the industry average of 18.78 and the S&P 500 average of 25.91.
• Forward P/E of 7.33, suggesting continued undervaluation.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios are better than 92%+ of industry peers, reinforcing its cheap valuation.

2. Solid Profitability

With a 7/10 profitability rating, PCRX demonstrates strong operational efficiency:

• Operating Margin of 12.16%, outperforming 82.83% of pharmaceutical peers.
• Gross Margin of 76.46%, placing it in the top tier of the industry.
• Positive cash flow generation in four of the past five years.

3. Stable Growth Prospects

PCRX earns a 6/10 growth rating, supported by:

• Revenue growth of 27.59% over the past year and 10.73% annualized over the last few years.
• Expected EPS growth of 13.49% annually in the coming years.

4. Reasonable Financial Health

The company’s 5/10 health rating reflects manageable risks:

• Debt-to-FCF ratio of 3.66, indicating it could repay debt in under four years from free cash flow.
• Current Ratio of 2.41, showing sufficient liquidity to cover short-term obligations.

Potential Risks

• Negative ROIC vs. WACC, suggesting some inefficiency in capital allocation.
• Moderate Altman-Z score (1.85), indicating limited but not negligible bankruptcy risk.

For a deeper dive into PCRX’s fundamentals, review the full analysis report here.

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.