Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


INCYTE CORP

Nasdaq / Health Care / Biotechnology

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to INCY. INCY was compared to 592 industry peers in the Biotechnology industry. INCY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. INCY is evaluated to be cheap and growing strongly. This does not happen too often! These ratings could make INCY a good candidate for value and growth and quality investing.



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1. Profitability

1.1 Basic Checks

In the past year INCY was profitable.
INCY had a positive operating cash flow in the past year.
INCY had positive earnings in 4 of the past 5 years.
INCY had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

INCY has a Return On Assets of 8.81%. This is amongst the best in the industry. INCY outperforms 96.94% of its industry peers.
With an excellent Return On Equity value of 11.51%, INCY belongs to the best of the industry, outperforming 96.60% of the companies in the same industry.
INCY has a better Return On Invested Capital (8.00%) than 96.43% of its industry peers.
The Average Return On Invested Capital over the past 3 years for INCY is below the industry average of 13.58%.
Industry RankSector Rank
ROA 8.81%
ROE 11.51%
ROIC 8%
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

INCY has a better Profit Margin (16.17%) than 97.11% of its industry peers.
In the last couple of years the Profit Margin of INCY has grown nicely.
Looking at the Operating Margin, with a value of 17.64%, INCY belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
INCY's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 93.71%, INCY belongs to the best of the industry, outperforming 95.24% of the companies in the same industry.
INCY's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 17.64%
PM (TTM) 16.17%
GM 93.71%
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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2. Health

2.1 Basic Checks

INCY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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.
The debt/assets ratio for INCY has been reduced compared to a year ago.

2.2 Solvency

INCY has an Altman-Z score of 6.32. This indicates that INCY is financially healthy and has little risk of bankruptcy at the moment.
INCY has a better Altman-Z score (6.32) than 80.10% of its industry peers.
The Debt to FCF ratio of INCY is 0.07, which is an excellent value as it means it would take INCY, only 0.07 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.07, INCY belongs to the best of the industry, outperforming 97.79% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that INCY is not too dependend on debt financing.
INCY has a Debt to Equity ratio of 0.01. This is comparable to the rest of the industry: INCY outperforms 45.24% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.07
Altman-Z 6.32
ROIC/WACC0.89
WACC8.98%

2.3 Liquidity

INCY has a Current Ratio of 3.75. This indicates that INCY is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of INCY (3.75) is comparable to the rest of the industry.
INCY has a Quick Ratio of 3.69. This indicates that INCY is financially healthy and has no problem in meeting its short term obligations.
INCY has a Quick ratio of 3.69. This is comparable to the rest of the industry: INCY outperforms 42.01% of its industry peers.
Industry RankSector Rank
Current Ratio 3.75
Quick Ratio 3.69

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 26.62% over the past year.
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 8.87%.
INCY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.45% yearly.
EPS 1Y (TTM)26.62%
EPS 3YN/A
EPS 5Y27.86%
EPS growth Q2Q70.97%
Revenue 1Y (TTM)8.87%
Revenue growth 3Y11.49%
Revenue growth 5Y14.45%
Revenue growth Q2Q9.35%

3.2 Future

The Earnings Per Share is expected to grow by 18.66% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.13% on average over the next years. This is quite good.
EPS Next Y33.07%
EPS Next 2Y25.87%
EPS Next 3Y25.08%
EPS Next 5Y18.67%
Revenue Next Year12.52%
Revenue Next 2Y11.59%
Revenue Next 3Y11.38%
Revenue Next 5Y8.13%

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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4. Valuation

4.1 Price/Earnings Ratio

INCY is valuated correctly with a Price/Earnings ratio of 16.18.
INCY's Price/Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 97.45% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. INCY is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 12.16 indicates a correct valuation of INCY.
INCY's Price/Forward Earnings ratio is rather cheap when compared to the industry. INCY is cheaper than 98.13% of the companies in the same industry.
INCY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.79, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 16.18
Fwd PE 12.16

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, INCY is valued cheaply inside the industry as 97.62% of the companies are valued more expensively.
96.26% of the companies in the same industry are more expensive than INCY, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 27.57
EV/EBITDA 11.28

4.3 Compensation for Growth

INCY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of INCY may justify a higher PE ratio.
A more expensive valuation may be justified as INCY's earnings are expected to grow with 25.08% in the coming years.
PEG (NY)0.49
PEG (5Y)0.58
EPS Next 2Y25.87%
EPS Next 3Y25.08%

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5. Dividend

5.1 Amount

INCY does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A