We assign a fundamental rating of 4 out of 10 to ETON. ETON was compared to 190 industry peers in the Pharmaceuticals industry. While ETON seems to be doing ok healthwise, there are quite some concerns on its profitability. ETON is growing strongly while it is still valued neutral. This is a good combination!

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ETON had negative earnings in the past year.
ETON had a positive operating cash flow in the past year.
ETON had negative earnings in each of the past 5 years.
In multiple years ETON reported negative operating cash flow during the last 5 years.

1.2 Ratios

ETON has a Return On Assets of -6.39%. This is in the better half of the industry: ETON outperforms 71.05% of its industry peers.
Looking at the Return On Equity, with a value of -28.89%, ETON is in the better half of the industry, outperforming 61.05% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	-6.39%
ROE	-28.89%
ROIC	N/A

ROA(3y)-14.67%

ROA(5y)-31.48%

ROE(3y)-30.22%

ROE(5y)-56.08%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

ETON has a better Gross Margin (51.36%) than 65.26% of its industry peers.
In the last couple of years the Gross Margin of ETON has grown nicely.
ETON does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	N/A
GM	51.36%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-11.67%

GM growth 5Y2.47%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ETON does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, ETON has more shares outstanding
The number of shares outstanding for ETON has been increased compared to 5 years ago.
The debt/assets ratio for ETON is higher compared to a year ago.

2.2 Solvency

ETON has an Altman-Z score of 2.38. This is not the best score and indicates that ETON is in the grey zone with still only limited risk for bankruptcy at the moment.
ETON's Altman-Z score of 2.38 is fine compared to the rest of the industry. ETON outperforms 63.68% of its industry peers.
ETON has a debt to FCF ratio of 2.36. This is a good value and a sign of high solvency as ETON would need 2.36 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.36, ETON belongs to the top of the industry, outperforming 92.63% of the companies in the same industry.
A Debt/Equity ratio of 1.31 is on the high side and indicates that ETON has dependencies on debt financing.
ETON has a worse Debt to Equity ratio (1.31) than 75.26% of its industry peers.
Although ETON 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	1.31
Debt/FCF	2.36
Altman-Z	2.38

ROIC/WACCN/A

WACC9.26%

2.3 Liquidity

ETON has a Current Ratio of 1.63. This is a normal value and indicates that ETON is financially healthy and should not expect problems in meeting its short term obligations.
ETON's Current ratio of 1.63 is on the low side compared to the rest of the industry. ETON is outperformed by 68.95% of its industry peers.
ETON has a Quick Ratio of 1.25. This is a normal value and indicates that ETON is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ETON (1.25) is worse than 71.58% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.63
Quick Ratio	1.25

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ETON shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 42.86%, which is quite impressive.
The Revenue has grown by 102.77% in the past year. This is a very strong growth!
ETON shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 109.79% yearly.

EPS 1Y (TTM)42.86%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%-333.33%

Revenue 1Y (TTM)102.77%

Revenue growth 3Y21.35%

Revenue growth 5Y109.79%

Sales Q2Q%117.54%

3.2 Future

Based on estimates for the next years, ETON will show a very strong growth in Earnings Per Share. The EPS will grow by 82.58% on average per year.
Based on estimates for the next years, ETON will show a very strong growth in Revenue. The Revenue will grow by 40.91% on average per year.

EPS Next Y19.86%

EPS Next 2Y192.94%

EPS Next 3Y134.56%

EPS Next 5Y82.58%

Revenue Next Year109.09%

Revenue Next 2Y64.69%

Revenue Next 3Y53.88%

Revenue Next 5Y40.91%

3.3 Evolution

The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

ETON reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
ETON is valuated correctly with a Price/Forward Earnings ratio of 16.32.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ETON indicates a rather cheap valuation: ETON is cheaper than 81.58% of the companies listed in the same industry.
ETON is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	16.32

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ETON is valued a bit cheaper than 74.74% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ETON indicates a rather cheap valuation: ETON is cheaper than 80.53% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	31.28
EV/EBITDA	353.95

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.
A more expensive valuation may be justified as ETON's earnings are expected to grow with 134.56% in the coming years.