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

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



7

1. Profitability

1.1 Basic Checks

In the past year HALO was profitable.
HALO had a positive operating cash flow in the past year.
Of the past 5 years HALO 4 years were profitable.
HALO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

HALO has a Return On Assets of 17.31%. This is amongst the best in the industry. HALO outperforms 98.80% of its industry peers.
HALO's Return On Equity of 179.30% is amongst the best of the industry. HALO outperforms 100.00% of its industry peers.
HALO has a Return On Invested Capital of 18.09%. This is amongst the best in the industry. HALO outperforms 98.80% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HALO is above the industry average of 14.45%.
The last Return On Invested Capital (18.09%) for HALO is above the 3 year average (17.78%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 17.31%
ROE 179.3%
ROIC 18.09%
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 has a better Profit Margin (36.95%) than 99.49% of its industry peers.
HALO's Profit Margin has declined in the last couple of years.
HALO has a better Operating Margin (44.25%) than 99.49% of its industry peers.
HALO's Operating Margin has declined in the last couple of years.
HALO's Gross Margin of 78.51% is amongst the best of the industry. HALO outperforms 86.84% of its industry peers.
In the last couple of years the Gross Margin of HALO has declined.
Industry RankSector Rank
OM 44.25%
PM (TTM) 36.95%
GM 78.51%
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

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HALO is creating value.
Compared to 1 year ago, HALO has less shares outstanding
Compared to 5 years ago, HALO has less shares outstanding
HALO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.84 indicates that HALO is not in any danger for bankruptcy at the moment.
The Altman-Z score of HALO (3.84) is better than 74.70% of its industry peers.
HALO has a debt to FCF ratio of 3.54. This is a good value and a sign of high solvency as HALO would need 3.54 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.54, HALO belongs to the top of the industry, outperforming 95.90% of the companies in the same industry.
HALO has a Debt/Equity ratio of 8.44. This is a high value indicating a heavy dependency on external financing.
HALO's Debt to Equity ratio of 8.44 is on the low side compared to the rest of the industry. HALO is outperformed by 84.96% of its industry peers.
Industry RankSector Rank
Debt/Equity 8.44
Debt/FCF 3.54
Altman-Z 3.84
ROIC/WACC2.49
WACC7.26%

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 better Current ratio (6.64) than 65.47% of its industry peers.
HALO has a Quick Ratio of 5.36. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 5.36, HALO is in line with its industry, outperforming 57.44% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 6.64
Quick Ratio 5.36

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9

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 39.64% over the past year.
HALO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 45.64% yearly.
HALO shows a strong growth in Revenue. In the last year, the Revenue has grown by 22.40%.
HALO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 40.42% yearly.
EPS 1Y (TTM)39.64%
EPS 3Y45.64%
EPS 5YN/A
EPS growth Q2Q68.09%
Revenue 1Y (TTM)22.4%
Revenue growth 3Y45.79%
Revenue growth 5Y40.42%
Revenue growth Q2Q20.81%

3.2 Future

Based on estimates for the next years, HALO will show a very strong growth in Earnings Per Share. The EPS will grow by 22.93% on average per year.
The Revenue is expected to grow by 13.80% on average over the next years. This is quite good.
EPS Next Y35.27%
EPS Next 2Y29.38%
EPS Next 3Y30.48%
EPS Next 5Y22.93%
Revenue Next Year14.89%
Revenue Next 2Y14.25%
Revenue Next 3Y16.45%
Revenue Next 5Y13.8%

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 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

With a Price/Earnings ratio of 14.42, HALO is valued correctly.
Based on the Price/Earnings ratio, HALO is valued cheaply inside the industry as 97.78% of the companies are valued more expensively.
HALO is valuated rather cheaply when we compare the Price/Earnings ratio to 28.15, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 9.61 indicates a reasonable valuation of HALO.
98.12% of the companies in the same industry are more expensive than HALO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.20. HALO is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 14.42
Fwd PE 9.61

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HALO is valued cheaply inside the industry as 96.58% of the companies are valued more expensively.
98.46% of the companies in the same industry are more expensive than HALO, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 13.41
EV/EBITDA 13.94

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.
HALO has a very decent profitability rating, which may justify a higher PE ratio.
HALO's earnings are expected to grow with 30.48% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.41
PEG (5Y)N/A
EPS Next 2Y29.38%
EPS Next 3Y30.48%

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0

5. Dividend

5.1 Amount

No dividends for HALO!.
Industry RankSector Rank
Dividend Yield N/A

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