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

Overall INCY gets a fundamental rating of 7 out of 10. We evaluated INCY against 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. INCY is growing strongly while it also seems undervalued. This is an interesting combination 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.
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's Return On Assets of 10.45% is amongst the best of the industry. INCY outperforms 97.27% of its industry peers.
INCY's Return On Equity of 13.82% is amongst the best of the industry. INCY outperforms 96.75% of its industry peers.
INCY has a Return On Invested Capital of 8.44%. This is amongst the best in the industry. INCY outperforms 96.41% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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

INCY's Profit Margin of 19.78% is amongst the best of the industry. INCY outperforms 97.44% of its industry peers.
INCY's Profit Margin has improved in the last couple of years.
The Operating Margin of INCY (18.91%) is better than 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.
INCY's Gross Margin has been stable in the last couple of years.
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.
Compared to 1 year ago, INCY has more shares outstanding
The number of shares outstanding for INCY has been increased compared to 5 years ago.
INCY has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 5.66 indicates that INCY is not in any danger for bankruptcy at the moment.
The Altman-Z score of INCY (5.66) is better than 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's Debt to FCF ratio of 0.04 is amongst the best of 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.
The Debt to Equity ratio of INCY (0.01) is comparable to the rest of the industry.
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.
The Current ratio of INCY (3.47) is worse than 61.37% of its industry peers.
A Quick Ratio of 3.43 indicates that INCY has no problem at all paying its short term obligations.
The Quick ratio of INCY (3.43) is worse 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.
INCY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.86% yearly.
Looking at the last year, INCY shows a quite strong growth in Revenue. The Revenue has grown by 8.58% in the last year.
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)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

Based on estimates for the next years, INCY will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.85% on average per year.
INCY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.58% yearly.
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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9

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.18, which indicates a correct valuation of INCY.
Based on the Price/Earnings ratio, INCY is valued cheaper than 97.61% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.73, INCY is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 9.78, the valuation of INCY can be described as reasonable.
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.
INCY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.41.
Industry RankSector Rank
PE 14.18
Fwd PE 9.78

4.2 Price Multiples

97.95% of the companies in the same industry are more expensive than INCY, based on the Enterprise Value to EBITDA ratio.
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

INCY's 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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