Stock Analysis: Decent Value Stocks

Fundamental Rating

INCY gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 587 industry peers in the Biotechnology industry. Both the health and profitability get an excellent rating, making INCY a very profitable company, without any liquidiy or solvency issues. INCY has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings would make INCY suitable for value and growth and quality investing!

1. Profitability

1.1 Basic Checks

In the past year INCY was profitable.

In the past year INCY had a positive cash flow from operations.

Of the past 5 years INCY 4 years were profitable.

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

1.2 Ratios

INCY has a better Return On Assets (10.45%) than 97.27% of its industry peers.

The Return On Equity of INCY (13.82%) is better than 96.58% of its industry peers.

INCY's Return On Invested Capital of 8.44% is amongst the best of the industry. INCY outperforms 96.58% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for INCY is significantly below the industry average of 14.12%.

		Industry Rank	Sector 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

With an excellent Profit Margin value of 19.78%, INCY belongs to the best of the industry, outperforming 97.61% of the companies in the same industry.

In the last couple of years the Profit Margin of INCY has grown nicely.

The Operating Margin of INCY (18.91%) is better than 96.92% of its industry peers.

INCY's Operating Margin has improved in the last couple of years.

INCY has a Gross Margin of 93.73%. This is amongst the best in the industry. INCY outperforms 94.87% 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 Rank	Sector 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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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so INCY is still creating some value.

The number of shares outstanding for INCY has been increased compared to 1 year ago.

INCY has more shares outstanding than it did 5 years ago.

INCY has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 5.64 indicates that INCY is not in any danger for bankruptcy at the moment.

INCY's Altman-Z score of 5.64 is amongst the best of the industry. INCY outperforms 80.85% of its industry peers.

The Debt to FCF ratio of INCY is 0.04, which is an excellent value as it means it would take INCY, only 0.04 years of fcf income to pay off 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.

Looking at the Debt to Equity ratio, with a value of 0.01, INCY is in line with its industry, outperforming 47.35% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.01
Debt/FCF	0.04
Altman-Z	5.64

ROIC/WACC0.93

WACC9.1%

2.3 Liquidity

A Current Ratio of 3.47 indicates that INCY has no problem at all paying its short term obligations.

Looking at the Current ratio, with a value of 3.47, INCY is doing worse than 61.71% of the companies in the same industry.

A Quick Ratio of 3.43 indicates that INCY has no problem at all paying its short term obligations.

INCY's Quick ratio of 3.43 is on the low side compared to the rest of the industry. INCY is outperformed by 60.34% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.47
Quick Ratio	3.43

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 45.77% over the past year.

Measured over the past years, INCY shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.86% on average per year.

The Revenue has grown by 8.58% in the past year. This is quite good.

The Revenue has been growing by 14.45% on average over the past years. This is quite good.

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.

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

INCY is valuated correctly with a Price/Earnings ratio of 14.12.

INCY's Price/Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 97.78% of the companies in the same industry.

The average S&P500 Price/Earnings ratio is at 28.31. INCY is valued rather cheaply when compared to this.

With a Price/Forward Earnings ratio of 9.73, the valuation of INCY can be described as very reasonable.

Based on the Price/Forward Earnings ratio, INCY is valued cheaper than 98.80% of the companies in the same industry.

The average S&P500 Price/Forward Earnings ratio is at 20.48. INCY is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	14.12
Fwd PE	9.73

4.2 Price Multiples

INCY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. INCY is cheaper than 97.95% of the companies in the same industry.

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