Stock Analysis: Affordable Growth

Fundamental Rating

Overall HRMY gets a fundamental rating of 8 out of 10. We evaluated HRMY against 198 industry peers in the Pharmaceuticals industry. HRMY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. HRMY is growing strongly while it also seems undervalued. This is an interesting combination These ratings could make HRMY a good candidate for value and growth and quality investing.

1. Profitability

1.1 Basic Checks

HRMY had positive earnings in the past year.

In the past year HRMY had a positive cash flow from operations.

HRMY had positive earnings in 4 of the past 5 years.

HRMY had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 14.56%, HRMY belongs to the top of the industry, outperforming 95.96% of the companies in the same industry.

HRMY has a better Return On Equity (22.07%) than 92.93% of its industry peers.

HRMY has a Return On Invested Capital of 18.94%. This is amongst the best in the industry. HRMY outperforms 93.43% of its industry peers.

HRMY had an Average Return On Invested Capital over the past 3 years of 18.27%. This is significantly below the industry average of 41.61%.

The last Return On Invested Capital (18.94%) for HRMY is above the 3 year average (18.27%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	14.56%
ROE	22.07%
ROIC	18.94%

ROA(3y)19.12%

ROA(5y)10.08%

ROE(3y)31.57%

ROE(5y)9.53%

ROIC(3y)18.27%

ROIC(5y)15.29%

1.3 Margins

Looking at the Profit Margin, with a value of 20.36%, HRMY belongs to the top of the industry, outperforming 92.42% of the companies in the same industry.

HRMY's Profit Margin has improved in the last couple of years.

HRMY's Operating Margin of 29.09% is amongst the best of the industry. HRMY outperforms 93.43% of its industry peers.

HRMY's Operating Margin has declined in the last couple of years.

HRMY's Gross Margin of 78.06% is amongst the best of the industry. HRMY outperforms 84.34% of its industry peers.

In the last couple of years the Gross Margin of HRMY has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	29.09%
PM (TTM)	20.36%
GM	78.06%

OM growth 3Y-2.32%

OM growth 5YN/A

PM growth 3Y21.57%

PM growth 5YN/A

GM growth 3Y-1.56%

GM growth 5Y1.26%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HRMY is creating value.

HRMY has more shares outstanding than it did 1 year ago.

Compared to 5 years ago, HRMY has less shares outstanding

The debt/assets ratio for HRMY has been reduced compared to a year ago.

2.2 Solvency

HRMY has an Altman-Z score of 5.14. This indicates that HRMY is financially healthy and has little risk of bankruptcy at the moment.

HRMY has a better Altman-Z score (5.14) than 82.32% of its industry peers.

HRMY has a debt to FCF ratio of 0.82. This is a very positive value and a sign of high solvency as it would only need 0.82 years to pay back of all of its debts.

HRMY has a better Debt to FCF ratio (0.82) than 94.95% of its industry peers.

HRMY has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.

Looking at the Debt to Equity ratio, with a value of 0.25, HRMY is in line with its industry, outperforming 45.96% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.25
Debt/FCF	0.82
Altman-Z	5.14

ROIC/WACC1.91

WACC9.9%

2.3 Liquidity

HRMY has a Current Ratio of 3.31. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.

HRMY has a Current ratio (3.31) which is in line with its industry peers.

HRMY has a Quick Ratio of 3.27. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.

HRMY's Quick ratio of 3.27 is fine compared to the rest of the industry. HRMY outperforms 60.10% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.31
Quick Ratio	3.27

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

HRMY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.82%.

Measured over the past years, HRMY shows a very strong growth in Earnings Per Share. The EPS has been growing by 44.61% on average per year.

Looking at the last year, HRMY shows a very strong growth in Revenue. The Revenue has grown by 22.80%.

HRMY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 160.13% yearly.

EPS 1Y (TTM)7.82%

EPS 3Y44.61%

EPS 5YN/A

EPS Q2Q%16.42%

Revenue 1Y (TTM)22.8%

Revenue growth 3Y32.77%

Revenue growth 5Y160.13%

Sales Q2Q%19.48%

3.2 Future

The Earnings Per Share is expected to grow by 36.90% on average over the next years. This is a very strong growth

Based on estimates for the next years, HRMY will show a very strong growth in Revenue. The Revenue will grow by 21.10% on average per year.

EPS Next Y25.16%

EPS Next 2Y30.64%

EPS Next 3Y31.63%

EPS Next 5Y36.9%

Revenue Next Year17.81%

Revenue Next 2Y18.1%

Revenue Next 3Y18.92%

Revenue Next 5Y21.1%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 12.23 indicates a correct valuation of HRMY.

Based on the Price/Earnings ratio, HRMY is valued cheaper than 87.88% of the companies in the same industry.

Compared to an average S&P500 Price/Earnings ratio of 24.29, HRMY is valued a bit cheaper.

HRMY is valuated cheaply with a Price/Forward Earnings ratio of 7.48.

92.42% of the companies in the same industry are more expensive than HRMY, based on the Price/Forward Earnings ratio.

Compared to an average S&P500 Price/Forward Earnings ratio of 20.42, HRMY is valued rather cheaply.

		Industry Rank	Sector Rank
PE	12.23
Fwd PE	7.48

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HRMY is valued cheaper than 90.40% of the companies in the same industry.

Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRMY indicates a rather cheap valuation: HRMY is cheaper than 91.92% of the companies listed in the same industry.