UNITED THERAPEUTICS CORP (NASDAQ:UTHR) - A Strong Candidate for GARP Investors

UNITED THERAPEUTICS CORP (NASDAQ:UTHR) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, a biotechnology firm focused on treating pulmonary arterial hypertension and other chronic conditions, meets key criteria outlined in Peter Lynch’s investment strategy. With strong profitability, financial health, and an attractive valuation, UTHR presents a balanced opportunity for long-term investors.

Why UTHR Fits the GARP Approach

• Sustainable Growth: UTHR has delivered a 5-year average EPS growth of 16.88%, aligning with Lynch’s preference for steady but not excessive growth. Future EPS growth is projected at 12.95%, indicating continued momentum.
• Reasonable Valuation: The stock trades at a P/E ratio of 11.51, well below the industry average of 59.76 and the S&P 500’s 26.57. Its PEG ratio (0.68) suggests the stock is undervalued relative to its growth prospects.
• Strong Profitability: UTHR boasts a return on equity (ROE) of 17.79% and a profit margin of 40.44%, outperforming most peers in the biotechnology sector.
• Financial Health: The company has no debt, a current ratio of 5.46, and a high Altman-Z score (11.22), reflecting a robust balance sheet.
• Cash Flow Stability: Consistent positive earnings and operating cash flow over the past five years reinforce its reliability.

Fundamental Snapshot

Our full fundamental report rates UTHR 7 out of 10, highlighting its strengths in profitability and valuation while noting moderate growth expectations. The company’s focus on niche therapies and efficient capital allocation further supports its long-term potential.

For more stocks matching the Peter Lynch strategy, explore our screener results.

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.