Stock Analysis: Affordable Growth

Fundamental Rating

We assign a fundamental rating of 7 out of 10 to HALO. HALO was compared to 588 industry peers in the Biotechnology industry. HALO gets an excellent profitability rating and is at the same time showing great financial health properties. HALO is growing strongly while it also seems undervalued. This is an interesting combination These ratings could make HALO a good candidate for value and growth and quality investing.

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.

Of the past 5 years HALO 4 years had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 16.25%, HALO belongs to the best of the industry, outperforming 98.97% of the companies in the same industry.

HALO has a better Return On Equity (335.99%) than 100.00% of its industry peers.

HALO has a Return On Invested Capital of 17.00%. This is amongst the best in the industry. HALO outperforms 98.46% of its industry peers.

HALO had an Average Return On Invested Capital over the past 3 years of 17.78%. This is above the industry average of 13.58%.

		Industry Rank	Sector 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 has a better Profit Margin (33.96%) than 99.15% of its industry peers.

In the last couple of years the Profit Margin of HALO has declined.

HALO's Operating Margin of 41.02% is amongst the best of the industry. HALO outperforms 99.32% of its industry peers.

In the last couple of years the Operating Margin of HALO has declined.

With an excellent Gross Margin value of 76.82%, HALO belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.

HALO's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector 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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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 HALO is creating value.

The number of shares outstanding for HALO has been reduced compared to 1 year ago.

Compared to 5 years ago, HALO has less shares outstanding

Compared to 1 year ago, HALO has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 3.39 indicates that HALO is not in any danger for bankruptcy at the moment.

Looking at the Altman-Z score, with a value of 3.39, HALO is in the better half of the industry, outperforming 76.58% of the companies in the same industry.

HALO has a debt to FCF ratio of 4.02. This is a neutral value as HALO would need 4.02 years to pay back of all of its debts.

HALO has a Debt to FCF ratio of 4.02. This is amongst the best in the industry. HALO outperforms 95.21% 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.

The Debt to Equity ratio of HALO (17.89) is worse than 85.81% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	17.89
Debt/FCF	4.02
Altman-Z	3.39

ROIC/WACC2.37

WACC7.18%

2.3 Liquidity

A Current Ratio of 6.64 indicates that HALO has no problem at all paying its short term obligations.

Looking at the Current ratio, with a value of 6.64, HALO is in the better half of the industry, outperforming 66.32% of the companies in the same industry.

A Quick Ratio of 5.50 indicates that HALO has no problem at all paying its short term obligations.

The Quick ratio of HALO (5.50) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	6.64
Quick Ratio	5.5

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 25.23% 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 25.59%.

Measured over the past years, HALO shows a very strong growth in Revenue. The Revenue has been growing by 40.42% on average per year.

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.

Based on estimates for the next years, HALO will show a quite strong growth in Revenue. The Revenue will grow by 11.91% on average per year.

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

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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4. Valuation

4.1 Price/Earnings Ratio

HALO is valuated correctly with a Price/Earnings ratio of 13.60.

Compared to the rest of the industry, the Price/Earnings ratio of HALO indicates a rather cheap valuation: HALO is cheaper than 97.78% of the companies listed in the same industry.

Compared to an average S&P500 Price/Earnings ratio of 24.80, HALO is valued a bit cheaper.

With a Price/Forward Earnings ratio of 10.05, the valuation of HALO can be described as very reasonable.

Compared to the rest of the industry, the Price/Forward Earnings ratio of HALO indicates a rather cheap valuation: HALO is cheaper than 98.80% of the companies listed in the same industry.

HALO is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.27, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	13.6
Fwd PE	10.05

4.2 Price Multiples

HALO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HALO is cheaper than 96.41% of the companies in the same industry.

98.46% of the companies in the same industry are more expensive than HALO, based on the Price/Free Cash Flow ratio.