SUPERNUS PHARMACEUTICALS INC (NASDAQ:SUPN) - An Undervalued Stock With Strong Fundamentals

SUPERNUS PHARMACEUTICALS INC (NASDAQ:SUPN) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company, which specializes in treatments for central nervous system disorders, shows a combination of solid financial health, strong profitability, and reasonable growth—all while trading at an attractive valuation.

Valuation

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

• A Price/Earnings (P/E) ratio of 12.35, well below the industry average of 24.14 and the S&P 500 average of 27.48.
• A Price/Forward Earnings ratio of 13.93, cheaper than nearly 80% of its pharmaceutical peers.
• An Enterprise Value to EBITDA ratio that ranks better than 93% of the industry, reinforcing its discounted valuation.

Financial Health

The company maintains a strong balance sheet, with:

• No outstanding debt, giving it one of the best Debt/Equity and Debt/FCF ratios in the sector.
• A Current Ratio of 2.44 and a Quick Ratio of 2.26, indicating ample liquidity to meet short-term obligations.
• An Altman-Z score of 5.19, well above the threshold for financial distress and better than 80% of industry competitors.

Profitability

SUPN’s profitability metrics stand out in the pharmaceutical sector:

• A Gross Margin of 89.75%, ranking in the top 7% of the industry.
• A Return on Assets (ROA) of 4.60% and Return on Equity (ROE) of 6.01%, both outperforming most peers.
• A Profit Margin of 9.27%, better than 86% of competitors.

Growth

While not a high-growth stock, SUPN shows steady expansion:

• Revenue grew by 11.81% in the past year, with a 5-year average growth rate of 11%.
• Earnings Per Share (EPS) surged by 98.54% year-over-year, though the 5-year average is a modest 3.78%.
• Analysts expect EPS growth of 15.42% annually in the coming years, suggesting accelerating profitability.

Our Decent Value screener lists more stocks with similar characteristics and is updated daily.
For a deeper dive, review the full fundamental report for SUPN.

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.