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 pulmonary arterial hypertension (PAH) and oncology treatments, meets key criteria from Peter Lynch’s investment strategy, combining steady growth, strong profitability, and an attractive valuation.

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 companies growing between 15% and 30%. This steady growth suggests a sustainable business model rather than overheated expansion.
• Reasonable Valuation: With a PEG ratio of 0.70 (well below Lynch’s threshold of 1), the stock appears undervalued relative to its growth prospects. The P/E ratio of 11.75 is also significantly lower than both the industry and S&P 500 averages.
• Strong Profitability: The company boasts a 17.79% Return on Equity (ROE), exceeding Lynch’s 15% benchmark. Margins are exceptional, with a 40.44% profit margin and 49.25% operating margin, placing UTHR in the top tier of its industry.
• Financial Health: UTHR has no debt, a current ratio of 5.46, and ample liquidity, ensuring stability even in uncertain markets.
• Industry Position: As a leader in PAH treatments with a diversified product portfolio, UTHR benefits from recurring revenue and high barriers to entry in its niche.

Fundamental Snapshot

The company earns a fundamental rating of 7/10, with top marks for profitability and financial health. Growth remains solid, though future revenue expansion is expected to moderate slightly. For a deeper dive, review the full fundamental analysis here.

Our Peter Lynch Strategy screener lists more stocks that fit this strategy and is updated daily.

Disclaimer

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