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 has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. An interesting combination arises when we look at growth and value: HALO is growing strongly while it also seems undervalued. These ratings could make HALO a good candidate 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.
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 better Return On Assets (16.25%) than 98.98% of its industry peers.
Looking at the Return On Equity, with a value of 335.99%, HALO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 17.00%, HALO belongs to the top of the industry, outperforming 98.46% of the companies in the same industry.
HALO had an Average Return On Invested Capital over the past 3 years of 17.78%. This is above the industry average of 13.85%.
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 has a better Profit Margin (33.96%) than 99.15% of its industry peers.
HALO's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 41.02%, HALO belongs to the top of the industry, outperforming 99.49% of the companies in the same industry.
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 86.35% of the companies in the same industry.
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

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.
HALO has less shares outstanding than it did 5 years ago.
HALO has a worse debt/assets ratio than last year.

2.2 Solvency

HALO has an Altman-Z score of 3.42. This indicates that HALO is financially healthy and has little risk of bankruptcy at the moment.
HALO's Altman-Z score of 3.42 is fine compared to the rest of the industry. HALO outperforms 76.45% 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 95.05% of its industry peers.
HALO has a Debt/Equity ratio of 17.89. This is a high value indicating a heavy dependency on external financing.
HALO has a Debt to Equity ratio of 17.89. This is amonst the worse of the industry: HALO underperforms 84.98% of its industry peers.
Industry RankSector Rank
Debt/Equity 17.89
Debt/FCF 4.02
Altman-Z 3.42
ROIC/WACC2.34
WACC7.27%

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.
The Current ratio of HALO (6.64) is better than 66.55% of its industry peers.
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 RankSector Rank
Current Ratio 6.64
Quick Ratio 5.5

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9

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.
Looking at the last year, HALO shows a very strong growth in Revenue. The Revenue has grown by 25.59%.
The Revenue has been growing by 40.42% on average over the past years. This is a very strong growth!
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

The Earnings Per Share is expected to grow by 20.73% on average over the next years. This is a very strong growth
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

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

Based on the Price/Earnings ratio of 13.87, the valuation of HALO can be described as correct.
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.
HALO is valuated rather cheaply when we compare the Price/Earnings ratio to 24.84, which is the current average of the S&P500 Index.
HALO is valuated reasonably with a Price/Forward Earnings ratio of 10.26.
Based on the Price/Forward Earnings ratio, HALO is valued cheaply inside the industry as 98.81% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.35, HALO is valued rather cheaply.
Industry RankSector Rank
PE 13.87
Fwd PE 10.26

4.2 Price Multiples

96.76% of the companies in the same industry are more expensive than HALO, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, HALO is valued cheaper than 98.12% of the companies in the same industry.
Industry RankSector Rank
P/FCF 13.13
EV/EBITDA 13.76

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

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

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