Stock Analysis: Decent Value Stocks

Fundamental Rating

ALKS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 587 industry peers in the Biotechnology industry. While ALKS has a great health rating, its profitability is only average at the moment. ALKS scores decently on growth, while it is valued quite cheap. This could make an interesting combination. With these ratings, ALKS could be worth investigating further for value investing!.

1. Profitability

1.1 Basic Checks

ALKS had positive earnings in the past year.

ALKS had a positive operating cash flow in the past year.

In the past 5 years ALKS reported 4 times negative net income.

ALKS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With an excellent Return On Assets value of 20.46%, ALKS belongs to the best of the industry, outperforming 99.32% of the companies in the same industry.

ALKS has a Return On Equity of 34.63%. This is amongst the best in the industry. ALKS outperforms 98.97% of its industry peers.

ALKS has a better Return On Invested Capital (24.24%) than 99.49% of its industry peers.

		Industry Rank	Sector Rank
ROA	20.46%
ROE	34.63%
ROIC	24.24%

ROA(3y)2.07%

ROA(5y)-2.07%

ROE(3y)3.36%

ROE(5y)-3.68%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

ALKS has a better Profit Margin (25.17%) than 98.46% of its industry peers.

The Operating Margin of ALKS (29.60%) is better than 98.46% of its industry peers.

ALKS's Gross Margin of 85.31% is amongst the best of the industry. ALKS outperforms 89.74% of its industry peers.

In the last couple of years the Gross Margin of ALKS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	29.6%
PM (TTM)	25.17%
GM	85.31%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.78%

GM growth 5Y0.22%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ALKS is creating value.

Compared to 1 year ago, ALKS has more shares outstanding

Compared to 5 years ago, ALKS has more shares outstanding

Compared to 1 year ago, ALKS has an improved debt to assets ratio.

2.2 Solvency

ALKS has an Altman-Z score of 4.17. This indicates that ALKS is financially healthy and has little risk of bankruptcy at the moment.

With a decent Altman-Z score value of 4.17, ALKS is doing good in the industry, outperforming 77.09% of the companies in the same industry.

ALKS has a debt to FCF ratio of 0.74. This is a very positive value and a sign of high solvency as it would only need 0.74 years to pay back of all of its debts.

Looking at the Debt to FCF ratio, with a value of 0.74, ALKS belongs to the top of the industry, outperforming 96.75% of the companies in the same industry.

A Debt/Equity ratio of 0.23 indicates that ALKS is not too dependend on debt financing.

ALKS's Debt to Equity ratio of 0.23 is on the low side compared to the rest of the industry. ALKS is outperformed by 68.38% of its industry peers.

Although ALKS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.23
Debt/FCF	0.74
Altman-Z	4.17

ROIC/WACC3.3

WACC7.34%

2.3 Liquidity

A Current Ratio of 3.20 indicates that ALKS has no problem at all paying its short term obligations.

ALKS has a worse Current ratio (3.20) than 64.62% of its industry peers.

A Quick Ratio of 2.77 indicates that ALKS has no problem at all paying its short term obligations.

Looking at the Quick ratio, with a value of 2.77, ALKS is doing worse than 67.52% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	3.2
Quick Ratio	2.77

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 704.35% over the past year.

The Earnings Per Share has been growing by 18.41% on average over the past years. This is quite good.

Looking at the last year, ALKS shows a very strong growth in Revenue. The Revenue has grown by 54.00%.

The Revenue has been growing by 8.74% on average over the past years. This is quite good.

EPS 1Y (TTM)704.35%

EPS 3Y48.92%

EPS 5Y18.41%

EPS growth Q2Q4300%

Revenue 1Y (TTM)54%

Revenue growth 3Y16.99%

Revenue growth 5Y8.74%

Revenue growth Q2Q21.83%

3.2 Future

ALKS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.51% yearly.

ALKS is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.19% yearly.

EPS Next Y100.77%

EPS Next 2Y38.71%

EPS Next 3Y25.25%

EPS Next 5Y10.51%

Revenue Next Year-7.19%

Revenue Next 2Y-3.42%

Revenue Next 3Y-2.31%

Revenue Next 5Y-2.19%

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.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 13.22 indicates a correct valuation of ALKS.

Based on the Price/Earnings ratio, ALKS is valued cheaper than 97.61% of the companies in the same industry.

Compared to an average S&P500 Price/Earnings ratio of 28.83, ALKS is valued rather cheaply.

The Price/Forward Earnings ratio is 8.95, which indicates a very decent valuation of ALKS.

Based on the Price/Forward Earnings ratio, ALKS is valued cheaper than 98.97% of the companies in the same industry.

The average S&P500 Price/Forward Earnings ratio is at 20.47. ALKS is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	13.22
Fwd PE	8.95

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALKS indicates a rather cheap valuation: ALKS is cheaper than 98.29% of the companies listed in the same industry.

99.15% of the companies in the same industry are more expensive than ALKS, based on the Price/Free Cash Flow ratio.