Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


HALOZYME THERAPEUTICS INC

Nasdaq / Health Care / Biotechnology

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to HALO. HALO was compared to 588 industry peers in the Biotechnology industry. HALO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. An interesting combination arises when we look at growth and value: HALO is growing strongly while it also seems undervalued. This makes HALO very considerable for value and growth and quality investing!



7

1. Profitability

1.1 Basic Checks

HALO had positive earnings in the past year.
HALO had a positive operating cash flow in the past year.
HALO had positive earnings in 4 of the past 5 years.
HALO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

HALO has a better Return On Assets (16.25%) than 98.97% of its industry peers.
The Return On Equity of HALO (335.99%) is better than 100.00% of its industry peers.
HALO has a better Return On Invested Capital (17.00%) than 98.46% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HALO is above the industry average of 13.60%.
Industry RankSector Rank
ROA 16.25%
ROE 335.99%
ROIC 17%
ROA(3y)21.23%
ROA(5y)14.64%
ROE(3y)219.81%
ROE(5y)133.26%
ROIC(3y)17.78%
ROIC(5y)N/A

1.3 Margins

HALO's Profit Margin of 33.96% is amongst the best of the industry. HALO outperforms 99.14% of its industry peers.
HALO's Profit Margin has declined in the last couple of years.
HALO has a better Operating Margin (41.02%) than 99.32% of its industry peers.
In the last couple of years the Operating Margin of HALO has declined.
The Gross Margin of HALO (76.82%) is better than 86.30% of its industry peers.
In the last couple of years the Gross Margin of HALO has declined.
Industry RankSector Rank
OM 41.02%
PM (TTM) 33.96%
GM 76.82%
OM growth 3Y-8.72%
OM growth 5YN/A
PM growth 3Y-11.05%
PM growth 5YN/A
GM growth 3Y-2.86%
GM growth 5Y-3.81%

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7

2. Health

2.1 Basic Checks

HALO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for HALO has been reduced compared to 1 year ago.
HALO has less shares outstanding than it did 5 years ago.
HALO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.42 indicates that HALO is not in any danger for bankruptcy at the moment.
HALO has a better Altman-Z score (3.42) than 77.05% of its industry peers.
The Debt to FCF ratio of HALO is 4.02, which is a neutral value as it means it would take HALO, 4.02 years of fcf income to pay off all of its debts.
HALO has a better Debt to FCF ratio (4.02) than 95.03% of its industry peers.
A Debt/Equity ratio of 17.89 is on the high side and indicates that HALO has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 17.89, HALO is doing worse than 85.27% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 17.89
Debt/FCF 4.02
Altman-Z 3.42
ROIC/WACC2.33
WACC7.29%

2.3 Liquidity

A Current Ratio of 6.64 indicates that HALO has no problem at all paying its short term obligations.
HALO has a Current ratio of 6.64. This is in the better half of the industry: HALO outperforms 66.44% of its industry peers.
HALO has a Quick Ratio of 5.50. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of HALO (5.50) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 6.64
Quick Ratio 5.5

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9

3. Growth

3.1 Past

HALO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.23%, which is quite impressive.
Measured over the past years, HALO shows a very strong growth in Earnings Per Share. The EPS has been growing by 45.64% on average per year.
HALO shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.59%.
HALO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 40.42% yearly.
EPS 1Y (TTM)25.23%
EPS 3Y45.64%
EPS 5YN/A
EPS growth Q2Q70.83%
Revenue 1Y (TTM)25.59%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Revenue growth Q2Q26.74%

3.2 Future

HALO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.73% yearly.
The Revenue is expected to grow by 11.91% on average over the next years. This is quite good.
EPS Next Y35.27%
EPS Next 2Y29.38%
EPS Next 3Y30.48%
EPS Next 5Y20.73%
Revenue Next Year14.89%
Revenue Next 2Y14.25%
Revenue Next 3Y16.45%
Revenue Next 5Y11.91%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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9

4. Valuation

4.1 Price/Earnings Ratio

HALO is valuated correctly with a Price/Earnings ratio of 13.87.
97.60% of the companies in the same industry are more expensive than HALO, based on the Price/Earnings ratio.
HALO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.92.
Based on the Price/Forward Earnings ratio of 10.26, the valuation of HALO can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HALO indicates a rather cheap valuation: HALO is cheaper than 98.63% of the companies listed in the same industry.
HALO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.49.
Industry RankSector Rank
PE 13.87
Fwd PE 10.26

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HALO is valued cheaper than 96.58% of the companies in the same industry.
HALO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HALO is cheaper than 98.29% of the companies in the same industry.
Industry RankSector Rank
P/FCF 13.13
EV/EBITDA 13.72

4.3 Compensation for Growth

HALO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of HALO may justify a higher PE ratio.
A more expensive valuation may be justified as HALO's earnings are expected to grow with 30.48% in the coming years.
PEG (NY)0.39
PEG (5Y)N/A
EPS Next 2Y29.38%
EPS Next 3Y30.48%

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0

5. Dividend

5.1 Amount

HALO does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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