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


INCYTE CORP

Nasdaq / Health Care / Biotechnology

Fundamental Rating

7

Overall INCY gets a fundamental rating of 7 out of 10. We evaluated INCY against 587 industry peers in the Biotechnology industry. Both the health and profitability get an excellent rating, making INCY a very profitable company, without any liquidiy or solvency issues. INCY is evaluated to be cheap and growing strongly. This does not happen too often! With these ratings, INCY could be worth investigating further for value and growth and quality investing!.



8

1. Profitability

1.1 Basic Checks

In the past year INCY was profitable.
In the past year INCY had a positive cash flow from operations.
Of the past 5 years INCY 4 years were profitable.
Of the past 5 years INCY 4 years had a positive operating cash flow.

1.2 Ratios

INCY's Return On Assets of 10.45% is amongst the best of the industry. INCY outperforms 97.27% of its industry peers.
INCY has a better Return On Equity (13.82%) than 96.75% of its industry peers.
With an excellent Return On Invested Capital value of 8.44%, INCY belongs to the best of the industry, outperforming 96.58% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for INCY is below the industry average of 13.91%.
Industry RankSector Rank
ROA 10.45%
ROE 13.82%
ROIC 8.44%
ROA(3y)11.29%
ROA(5y)7.72%
ROE(3y)14.82%
ROE(5y)10.07%
ROIC(3y)9.11%
ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 19.78%, INCY belongs to the top of the industry, outperforming 97.61% of the companies in the same industry.
In the last couple of years the Profit Margin of INCY has grown nicely.
INCY's Operating Margin of 18.91% is amongst the best of the industry. INCY outperforms 96.92% of its industry peers.
INCY's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 93.73%, INCY belongs to the top of the industry, outperforming 94.70% of the companies in the same industry.
INCY's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 18.91%
PM (TTM) 19.78%
GM 93.73%
OM growth 3YN/A
OM growth 5Y16.39%
PM growth 3YN/A
PM growth 5Y22.68%
GM growth 3Y-0.76%
GM growth 5Y-0.51%

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7

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so INCY is still creating some value.
The number of shares outstanding for INCY has been increased compared to 1 year ago.
INCY has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, INCY has an improved debt to assets ratio.

2.2 Solvency

INCY has an Altman-Z score of 5.69. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
INCY has a Altman-Z score of 5.69. This is amongst the best in the industry. INCY outperforms 80.51% of its industry peers.
INCY has a debt to FCF ratio of 0.04. This is a very positive value and a sign of high solvency as it would only need 0.04 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.04, INCY belongs to the top of the industry, outperforming 97.78% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that INCY is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.01, INCY perfoms like the industry average, outperforming 47.18% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.04
Altman-Z 5.69
ROIC/WACC0.93
WACC9.11%

2.3 Liquidity

A Current Ratio of 3.47 indicates that INCY has no problem at all paying its short term obligations.
INCY has a worse Current ratio (3.47) than 61.54% of its industry peers.
INCY has a Quick Ratio of 3.43. This indicates that INCY is financially healthy and has no problem in meeting its short term obligations.
INCY has a worse Quick ratio (3.43) than 60.34% of its industry peers.
Industry RankSector Rank
Current Ratio 3.47
Quick Ratio 3.43

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7

3. Growth

3.1 Past

INCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 45.77%, which is quite impressive.
The Earnings Per Share has been growing by 27.86% on average over the past years. This is a very strong growth
INCY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.58%.
INCY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.45% yearly.
EPS 1Y (TTM)45.77%
EPS 3YN/A
EPS 5Y27.86%
EPS growth Q2Q72.97%
Revenue 1Y (TTM)8.58%
Revenue growth 3Y11.49%
Revenue growth 5Y14.45%
Revenue growth Q2Q8.93%

3.2 Future

Based on estimates for the next years, INCY will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.85% on average per year.
The Revenue is expected to grow by 8.58% on average over the next years. This is quite good.
EPS Next Y31.69%
EPS Next 2Y24.97%
EPS Next 3Y24.94%
EPS Next 5Y17.85%
Revenue Next Year12.46%
Revenue Next 2Y11.59%
Revenue Next 3Y11.38%
Revenue Next 5Y8.58%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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9

4. Valuation

4.1 Price/Earnings Ratio

INCY is valuated correctly with a Price/Earnings ratio of 14.27.
Compared to the rest of the industry, the Price/Earnings ratio of INCY indicates a rather cheap valuation: INCY is cheaper than 97.61% of the companies listed in the same industry.
INCY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.02.
With a Price/Forward Earnings ratio of 9.84, the valuation of INCY can be described as very reasonable.
INCY's Price/Forward Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 98.80% of the companies in the same industry.
INCY is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.58, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 14.27
Fwd PE 9.84

4.2 Price Multiples

97.95% of the companies in the same industry are more expensive than INCY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, INCY is valued cheaper than 97.61% of the companies in the same industry.
Industry RankSector Rank
P/FCF 15.36
EV/EBITDA 9.8

4.3 Compensation for Growth

INCY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
INCY has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as INCY's earnings are expected to grow with 24.94% in the coming years.
PEG (NY)0.45
PEG (5Y)0.51
EPS Next 2Y24.97%
EPS Next 3Y24.94%

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0

5. Dividend

5.1 Amount

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

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