We assign a fundamental rating of 6 out of 10 to PEN. PEN was compared to 184 industry peers in the Health Care Equipment & Supplies industry. While PEN has a great health rating, its profitability is only average at the moment. PEN is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes PEN very considerable for growth investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year PEN was profitable.
PEN had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: PEN reported negative net income in multiple years.
In multiple years PEN reported negative operating cash flow during the last 5 years.

1.2 Ratios

PEN's Return On Assets of 9.40% is amongst the best of the industry. PEN outperforms 91.94% of its industry peers.
PEN has a Return On Equity of 12.07%. This is amongst the best in the industry. PEN outperforms 88.71% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.37%, PEN belongs to the top of the industry, outperforming 82.26% of the companies in the same industry.
PEN had an Average Return On Invested Capital over the past 3 years of 2.98%. This is significantly below the industry average of 8.84%.
The last Return On Invested Capital (7.37%) for PEN is above the 3 year average (2.98%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	9.4%
ROE	12.07%
ROIC	7.37%

ROA(3y)2.2%

ROA(5y)1.03%

ROE(3y)2.91%

ROE(5y)1.37%

ROIC(3y)2.98%

ROIC(5y)N/A

1.3 Margins

The Profit Margin of PEN (12.30%) is better than 88.17% of its industry peers.
PEN's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 12.95%, PEN belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
PEN's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 66.80%, PEN is in the better half of the industry, outperforming 70.97% of the companies in the same industry.
PEN's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	12.95%
PM (TTM)	12.3%
GM	66.8%

OM growth 3Y43.4%

OM growth 5Y-3.62%

PM growth 3Y18.27%

PM growth 5Y-33.26%

GM growth 3Y-0.21%

GM growth 5Y-1.44%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

PEN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for PEN has been reduced compared to 1 year ago.
PEN has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PEN has been reduced compared to a year ago.

2.2 Solvency

PEN has an Altman-Z score of 23.80. This indicates that PEN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 23.80, PEN belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
The Debt to FCF ratio of PEN is 0.15, which is an excellent value as it means it would take PEN, only 0.15 years of fcf income to pay off all of its debts.
PEN's Debt to FCF ratio of 0.15 is amongst the best of the industry. PEN outperforms 93.01% of its industry peers.
A Debt/Equity ratio of 0.02 indicates that PEN is not too dependend on debt financing.
PEN has a better Debt to Equity ratio (0.02) than 71.51% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.02
Debt/FCF	0.15
Altman-Z	23.8

ROIC/WACC0.74

WACC10.02%

2.3 Liquidity

A Current Ratio of 6.73 indicates that PEN has no problem at all paying its short term obligations.
PEN has a better Current ratio (6.73) than 86.02% of its industry peers.
PEN has a Quick Ratio of 4.18. This indicates that PEN is financially healthy and has no problem in meeting its short term obligations.
PEN has a better Quick ratio (4.18) than 77.42% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	6.73
Quick Ratio	4.18

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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

PEN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.47%, which is quite impressive.
Measured over the past years, PEN shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.23% on average per year.
Looking at the last year, PEN shows a quite strong growth in Revenue. The Revenue has grown by 14.61% in the last year.
The Revenue has been growing by 16.89% on average over the past years. This is quite good.

EPS 1Y (TTM)36.47%

EPS 3Y60.05%

EPS 5Y24.23%

EPS Q2Q%14.12%

Revenue 1Y (TTM)14.61%

Revenue growth 3Y16.91%

Revenue growth 5Y16.89%

Sales Q2Q%17.82%

3.2 Future

PEN is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.42% yearly.
PEN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.24% yearly.

EPS Next Y32.98%

EPS Next 2Y33.42%

EPS Next 3Y31.48%

EPS Next 5Y24.42%

Revenue Next Year16.21%

Revenue Next 2Y15.29%

Revenue Next 3Y14.8%

Revenue Next 5Y13.24%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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

PEN is valuated quite expensively with a Price/Earnings ratio of 98.97.
Based on the Price/Earnings ratio, PEN is valued a bit cheaper than 66.13% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. PEN is valued rather expensively when compared to this.
PEN is valuated quite expensively with a Price/Forward Earnings ratio of 70.32.
66.67% of the companies in the same industry are more expensive than PEN, based on the Price/Forward Earnings ratio.
PEN is valuated expensively when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	98.97
Fwd PE	70.32

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PEN indicates a somewhat cheap valuation: PEN is cheaper than 65.05% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PEN is valued a bit cheaper than 69.89% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	92.18
EV/EBITDA	70.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of PEN may justify a higher PE ratio.
PEN's earnings are expected to grow with 31.48% in the coming years. This may justify a more expensive valuation.