Alkermes PLC (ALKS, Financial) has experienced a remarkable surge in its stock price, with a 21.63% gain over the past week and an impressive 47.72% gain over the past three months. The company's market capitalization now stands at $5.44 billion, with the current stock price at $32.56. This recent performance has brought the stock to a valuation that GuruFocus deems as Fairly Valued, with a GF Value of $31.74. This is a shift from three months ago when the stock was considered Modestly Undervalued with a past GF Value of $33.98. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates.
Company Overview
Alkermes PLC is a prominent player in the drug manufacturing industry, focusing on the development and commercialization of pharmaceutical products for unmet medical needs across various therapeutic areas. The company leverages its proprietary technologies and collaborative arrangements to bring innovative treatments to market, benefiting from a range of technological, financial, and marketing resources. Alkermes sources active drug products from third parties or through licensing agreements to formulate its products.
Profitability Analysis
Despite its recent stock performance, Alkermes PLC's Profitability Rank is relatively low at 3/10. However, the company's operating margin is a robust 13.52%, outperforming 71.23% of 1022 companies in the industry. Alkermes also boasts a high ROE of 18.74% and an ROA of 10.43%, indicating efficient management of equity and assets respectively. The ROIC stands at an impressive 22.26%, suggesting the company is generating significant cash flow relative to the capital invested. However, Alkermes has only managed to achieve profitability in one of the past ten years, which is a concern for potential investors.
Growth Prospects
Alkermes PLC's Growth Rank is currently at 4/10. The company has seen a 3-year revenue growth rate per share of -3.00%, which, while not ideal, is still better than 23.81% of 907 companies in the same industry. The 5-year revenue growth rate per share is slightly positive at 2.00%. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is projected at -1.51%. On a more positive note, the 3-year EPS without NRI growth rate is 6.10%, and the 5-year rate is 12.80%, indicating some potential for earnings expansion.
Investor Holdings
Notable investors have taken significant positions in Alkermes PLC. The Vanguard Health Care Fund (Trades, Portfolio) holds 8,601,892 shares, representing a 5.15% share percentage. Renowned investor Jim Simons (Trades, Portfolio) has a 3.62% share percentage with 6,049,317 shares. PRIMECAP Management (Trades, Portfolio) also has a stake in the company, holding 3,565,625 shares, which equates to a 2.14% share percentage.
Competitive Landscape
Alkermes PLC operates in a competitive environment, with key players such as Perrigo Co PLC (PRGO, Financial) with a market cap of $4.38 billion, Alvotech (ALVO, Financial) valued at $4.2 billion, and Lantheus Holdings Inc (LNTH, Financial) with a market cap of $3.96 billion. These companies are closely matched in terms of market capitalization, indicating a highly competitive market for Alkermes.
Conclusion
In conclusion, Alkermes PLC's recent stock performance has been impressive, with significant gains over the past three months. The company's profitability metrics, such as operating margin, ROE, and ROIC, are strong compared to industry peers, although its Profitability Rank remains low. Growth prospects show mixed signals with some areas of concern, particularly in revenue growth. However, the company's EPS growth rates offer some optimism. With notable investors holding substantial shares and a competitive market landscape, Alkermes PLC presents an interesting case for value investors looking for opportunities in the drug manufacturing sector.
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.
