West Pharmaceutical Services Inc (WST, Financial) has recently garnered attention from the investment community, buoyed by its solid financial performance. With a current share price of $394.79, the company has enjoyed a daily increase of 1.85% and a notable three-month growth of 10.56%. An in-depth evaluation using the GF Score indicates that West Pharmaceutical Services Inc is on a promising path to significant expansion in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, designed to predict stock performance by evaluating five key aspects of valuation. This system has proven to be a reliable indicator of long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns than those with lower scores, making the GF Score an essential tool for investors seeking profitable investments. The GF Score ranges from 0 to 100, with 100 representing the pinnacle of potential outperformance.
- Financial strength rank: 9/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 5/10
- Momentum rank: 7/10
Each component of the GF Score is individually ranked, with each rank positively correlated with long-term stock performance. After a comprehensive analysis, West Pharmaceutical Services Inc has been awarded a GF Score of 93 out of 100, signaling a strong potential for market outperformance.
Understanding West Pharmaceutical Services Inc's Business
West Pharmaceutical Services Inc, with a market capitalization of $28.9 billion and annual sales of $2.95 billion, is a leading supplier in the pharmaceutical, biotechnology, and generic drug industries. Based in Pennsylvania, U.S., the company specializes in elastomer-based packaging components, non-glass containment solutions, and auto-injectors for injectable drugs. Operating in two segments—proprietary products (80% of revenue) and contract-manufactured products (20% of revenue)—West Pharmaceutical Services Inc generates around 55% of its revenue internationally and 45% from the United States.
Financial Strength Breakdown
West Pharmaceutical Services Inc's Financial Strength rating reflects a resilient balance sheet capable of withstanding economic fluctuations, indicative of a well-managed capital structure. The company's Interest Coverage ratio is an impressive 78.6, demonstrating a strong ability to meet its interest obligations—a quality highly regarded by the esteemed investor Benjamin Graham. Furthermore, with an Altman Z-Score of 21.01, West Pharmaceutical Services Inc is well-protected against financial distress, underscoring its financial stability. The company's strategic debt management is evident in its favorable Debt-to-Revenue ratio of 0.11, reinforcing its financial health.
Profitability Rank Breakdown
The Profitability Rank highlights West Pharmaceutical Services Inc's exceptional ability to generate profits compared to its industry counterparts. The company's Operating Margin has seen a significant increase over the past five years, with the latest figure standing at 23.98%. Additionally, West Pharmaceutical Services Inc's Gross Margin has consistently improved, indicating an increasing efficiency in converting revenue into profit.
Growth Rank Breakdown
West Pharmaceutical Services Inc's high Growth Rank reflects its dedication to business expansion. The company's 3-Year Revenue Growth Rate of 11.4% surpasses 59.64% of companies in the Medical Devices & Instruments industry. The consistent increase in EBITDA over the past few years, with a three-year growth rate of 17.9 and a five-year rate of 22, emphasizes West Pharmaceutical Services Inc's capacity for sustained growth.
Conclusion: A Strong Investment Prospect
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 similar opportunities can explore more companies with strong GF Scores using the GF Score Screen. With its robust financial health and strategic market position, West Pharmaceutical Services Inc stands as a compelling investment case for those looking to capitalize on market-leading performance.
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.
