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 592 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. HALO is evaluated to be cheap and growing strongly. This does not happen too often! These ratings would make HALO suitable for value and growth and quality investing!



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1. Profitability

1.1 Basic Checks

In the past year HALO was profitable.
In the past year HALO had a positive cash flow from operations.
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's Return On Assets of 16.25% is amongst the best of the industry. HALO outperforms 98.98% 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 98.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HALO is above the industry average of 13.58%.
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

Looking at the Profit Margin, with a value of 33.96%, HALO belongs to the top of the industry, outperforming 99.15% of the companies in the same industry.
HALO's Profit Margin has declined in the last couple of years.
The Operating Margin of HALO (41.02%) is better than 99.32% of its industry peers.
In the last couple of years the Operating Margin of HALO has declined.
Looking at the Gross Margin, with a value of 76.82%, HALO belongs to the top of the industry, outperforming 86.05% of the companies in the same industry.
HALO's Gross Margin has declined in the last couple of years.
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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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.
Compared to 1 year ago, HALO has less shares outstanding
HALO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HALO has a worse debt to assets ratio.

2.2 Solvency

HALO has an Altman-Z score of 3.51. This indicates that HALO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HALO (3.51) is better than 73.64% 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's Debt to FCF ratio of 4.02 is amongst the best of the industry. HALO outperforms 95.24% 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.
HALO has a Debt to Equity ratio of 17.89. This is amonst the worse of the industry: HALO underperforms 86.90% of its industry peers.
Industry RankSector Rank
Debt/Equity 17.89
Debt/FCF 4.02
Altman-Z 3.51
ROIC/WACC2.13
WACC7.97%

2.3 Liquidity

HALO has a Current Ratio of 6.64. This indicates that HALO is financially healthy and has no problem in meeting its short term obligations.
HALO has a Current ratio of 6.64. This is in the better half of the industry: HALO outperforms 63.95% of its industry peers.
A Quick Ratio of 5.50 indicates that HALO has no problem at all paying its short term obligations.
HALO has a Quick ratio (5.50) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 6.64
Quick Ratio 5.5

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.
HALO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 45.64% yearly.
Looking at the last year, HALO shows a very strong growth in Revenue. 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

Based on estimates for the next years, HALO will show a very strong growth in Earnings Per Share. The EPS will grow by 20.73% on average per year.
HALO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.91% yearly.
EPS Next Y35.2%
EPS Next 2Y29.58%
EPS Next 3Y30.61%
EPS Next 5Y20.73%
Revenue Next Year14.92%
Revenue Next 2Y14.36%
Revenue Next 3Y16.54%
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.
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

Based on the Price/Earnings ratio of 14.63, the valuation of HALO can be described as correct.
97.79% of the companies in the same industry are more expensive than HALO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.48, HALO is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 10.82, the valuation of HALO can be described as reasonable.
Based on the Price/Forward Earnings ratio, HALO is valued cheaper than 98.47% of the companies 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 22.79.
Industry RankSector Rank
PE 14.63
Fwd PE 10.82

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HALO is valued cheaply inside the industry as 96.60% of the companies are valued more expensively.
98.47% 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 13.82
EV/EBITDA 14.36

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 30.61% in the coming years.
PEG (NY)0.42
PEG (5Y)N/A
EPS Next 2Y29.58%
EPS Next 3Y30.61%

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5. Dividend

5.1 Amount

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