PACIRA BIOSCIENCES INC (NASDAQ:PCRX) – An Undervalued Stock Worth Considering

PACIRA BIOSCIENCES INC (NASDAQ:PCRX) was identified by our "Decent Value" stock screener as a potential candidate for value investors. The company, which specializes in non-opioid pain management solutions, shows a combination of reasonable growth, solid profitability, and an attractive valuation. Below, we examine why PCRX stands out.

Valuation

PCRX appears undervalued compared to industry peers and the broader market. Key highlights from the fundamental report include:

• Price/Earnings (P/E) ratio of 7.23, significantly lower than the industry average of 22.19 and the S&P 500 average of 27.29.
• Price/Forward Earnings ratio of 6.94, cheaper than 90% of its pharmaceutical industry peers.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios also suggest PCRX is priced attractively, ranking better than 95% of competitors.

Profitability

Despite some concerns, PCRX maintains strong profitability metrics:

• Operating Margin of 12.16%, outperforming 83% of industry peers.
• Gross Margin of 76.46%, placing it among the top performers in its sector.
• Return on Invested Capital (ROIC) of 5.65%, above the three-year average and better than 83.6% of competitors.

Financial Health

The company has a mixed but manageable financial position:

• Current Ratio of 2.41 indicates good short-term liquidity.
• Debt/Equity ratio of 0.48 suggests moderate leverage, though it is higher than 60.5% of peers.
• Altman-Z score of 1.75 signals some bankruptcy risk but still outperforms 63.6% of the industry.

Growth

PCRX has demonstrated consistent growth, though future projections show some moderation:

• Revenue grew 27.6% over the past year, with a 10.7% average annual growth rate over five years.
• Earnings Per Share (EPS) expanded by 6.6% last year, with a 14% average annual growth rate historically.
• Analysts expect EPS growth of 9.3% annually in the coming years, though revenue growth may slow to 7%.

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

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

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.