UNITED THERAPEUTICS CORP (NASDAQ:UTHR) – A Biotech Stock With Strong Fundamentals and Attractive Valuation

UNITED THERAPEUTICS CORP (NASDAQ:UTHR) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company combines solid profitability and financial health with an attractive valuation, making it worth a closer look.

Key Strengths

Valuation (Rating: 9/10)

• UTHR trades at a P/E ratio of 11.23, significantly below both the industry average (63.31) and the S&P500 (26.59).
• Its forward P/E of 9.70 suggests continued undervaluation relative to earnings growth expectations.
• The stock’s Enterprise Value/EBITDA and Price/Free Cash Flow ratios are also well below industry peers, indicating a margin of safety for investors.

Profitability (Rating: 9/10)

• The company boasts a 40.44% profit margin, outperforming 98.6% of biotech peers.
• Operating margin stands at 49.25%, among the highest in the sector.
• Strong returns on assets (15.63%) and equity (17.79%) reflect efficient capital deployment.

Financial Health (Rating: 8/10)

• UTHR has no debt, a rare advantage in the capital-intensive biotech industry.
• A current ratio of 5.46 and quick ratio of 5.23 demonstrate ample liquidity.
• The Altman-Z score of 11.01 indicates minimal bankruptcy risk.

Growth (Rating: 5/10)

• Revenue grew 19.85% YoY, with a 5-year CAGR of 14.71%.
• EPS increased 18.49% over the past year, supported by a 5-year CAGR of 16.88%.
• Analysts project 12.95% annual EPS growth moving forward, though revenue growth may slow to 7.48%.

Considerations

While growth expectations have moderated, UTHR’s strong margins, debt-free balance sheet, and discounted valuation provide a compelling case for value-oriented investors. The company’s focus on pulmonary arterial hypertension treatments offers stable cash flows, though investors should monitor pipeline developments and competitive pressures.

For a deeper dive, review the full fundamental analysis of UTHR.

Our Decent Value screener lists more stocks with strong valuations and fundamentals.

Disclaimer

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