West Pharmaceutical Services Inc (WST, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $404.77, West Pharmaceutical Services Inc has witnessed a daily loss of 1.19%, marked against a three-month change of 21.97%. A thorough analysis, underlined by the GF Score, suggests that West Pharmaceutical Services Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
With a high Financial Strength and Profitability rank, and perfect scores in Growth and Momentum, West Pharmaceutical Services Inc's GF Score of 96 out of 100 signals the highest outperformance potential. The slightly lower GF Value rank indicates that the stock may not be undervalued at its current price but is still a strong contender based on other metrics.
Understanding West Pharmaceutical Services Inc Business
West Pharmaceutical Services Inc is a Pennsylvania-based medical supplies company with a market cap of $29.95 billion and sales of $2.93 billion. The company boasts an impressive operating margin of 23.85% and operates as a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. West develops, manufactures, and distributes elastomer-based supplies for the containment and administration of injectable drugs, including basic equipment such as syringes, stoppers, and plungers, along with somewhat more complicated devices including auto-injectors and other self-injection platforms. The company reports in two segments: proprietary products (82% of 2021 sales) and contract-manufactured products (18%). It generates 55% of its revenue from international markets and 45% from the United States.
Financial Strength Breakdown
According to the Financial Strength rating, West Pharmaceutical Services Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for West Pharmaceutical Services Inc stands impressively at 73.48, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 23.68, West Pharmaceutical Services Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.11, West Pharmaceutical Services Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows West Pharmaceutical Services Inc's impressive standing among its peers in generating profit. The company's Operating Margin has increased over the past five years, with a current figure of 25.70%. Furthermore, West Pharmaceutical Services Inc's Gross Margin has also seen a consistent rise, indicating the company's growing proficiency in transforming revenue into profit.
Growth Rank Breakdown
Ranked highly in Growth, West Pharmaceutical Services Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 16%, outperforming 69.82% of companies in the Medical Devices & Instruments industry. Moreover, West Pharmaceutical Services Inc has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 25.8%, accentuating the company's continued capability to drive growth.
Next Steps
Considering West Pharmaceutical Services Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth trajectory may find West Pharmaceutical Services Inc a compelling addition to their portfolios. For those looking to explore further, GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
