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

Taking everything into account, INCY scores 7 out of 10 in our fundamental rating. INCY was compared to 587 industry peers in the Biotechnology industry. INCY 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: INCY is growing strongly while it also seems undervalued. This makes INCY very considerable for value and growth and quality investing!



8

1. Profitability

1.1 Basic Checks

INCY had positive earnings in the past year.
In the past year INCY had a positive cash flow from operations.
INCY had positive earnings in 4 of the past 5 years.
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.
INCY's Return On Invested Capital of 8.44% is amongst the best of the industry. INCY outperforms 96.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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

The Profit Margin of INCY (19.78%) is better than 97.44% of its industry peers.
In the last couple of years the Profit Margin of INCY has grown nicely.
INCY has a Operating Margin of 18.91%. This is amongst the best in the industry. INCY outperforms 96.92% of its industry peers.
In the last couple of years the Operating Margin of INCY has grown nicely.
INCY has a Gross Margin of 93.73%. This is amongst the best in the industry. INCY outperforms 95.04% of its industry peers.
In the last couple of years the Gross Margin of INCY has remained more or less at the same level.
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

INCY has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for INCY has been increased compared to 1 year ago.
The number of shares outstanding for INCY has been increased compared to 5 years ago.
The debt/assets ratio for INCY has been reduced compared to a year ago.

2.2 Solvency

INCY has an Altman-Z score of 5.66. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
INCY has a Altman-Z score of 5.66. This is amongst the best in the industry. INCY outperforms 80.17% 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.
INCY has a Debt to FCF ratio of 0.04. This is amongst the best in the industry. INCY outperforms 97.78% of its industry peers.
INCY has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
INCY has a Debt to Equity ratio of 0.01. This is comparable to the rest of the industry: INCY outperforms 47.18% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.04
Altman-Z 5.66
ROIC/WACC0.93
WACC9.12%

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 Current ratio of 3.47. This is in the lower half of the industry: INCY underperforms 61.37% 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 60.17% 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%.
Measured over the past years, INCY shows a quite strong growth in Revenue. The Revenue has been growing by 14.45% on average per year.
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

The Earnings Per Share is expected to grow by 17.85% on average over the next years. This is quite good.
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

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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9

4. Valuation

4.1 Price/Earnings Ratio

INCY is valuated correctly with a Price/Earnings ratio of 14.18.
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 is valuated rather cheaply when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.78, which indicates a very decent valuation of INCY.
INCY's Price/Forward Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 98.63% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of INCY to the average of the S&P500 Index (20.41), we can say INCY is valued rather cheaply.
Industry RankSector Rank
PE 14.18
Fwd PE 9.78

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaper than 97.95% of the companies in the same industry.
INCY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. INCY is cheaper than 97.78% of the companies in the same industry.
Industry RankSector Rank
P/FCF 15.26
EV/EBITDA 9.71

4.3 Compensation for Growth

The 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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