Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Eagle Pharmaceuticals, Inc. (NASDAQ:EGRX) due to its excellent fundamentals in more than one area. EGRX is a financially-healthy company with an impressive history and a excellent growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, take a look at the report on Eagle Pharmaceuticals here.
Solid track record with excellent balance sheet
EGRX delivered a bottom-line expansion of 42% in the prior year, with its most recent earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 25%, which is what investors like to see!
EGRX's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that EGRX has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. EGRX's has produced operating cash levels of 2.21x total debt over the past year, which implies that EGRX's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Eagle Pharmaceuticals, I've put together three relevant factors you should look at:
- Valuation: What is EGRX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EGRX is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does EGRX return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from EGRX as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of EGRX? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.