Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of JAZZ, it has a a strong history of performance and a excellent growth outlook not yet factored into the price. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Jazz Pharmaceuticals here.
Undervalued with high growth potential
One reason why investors are attracted to JAZZ is its earnings growth potential in the near future of 22% underlying the notable 24% return on equity over the next few years leading up to 2022. Over the past year, JAZZ has grown its earnings by 40%, with its most recent figure exceeding its annual average over the past five years. Not only did JAZZ outperformed its past performance, its growth also surpassed the Pharmaceuticals industry expansion, which generated a 2.6% earnings growth. This is what investors like to see!
JAZZ is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if JAZZ’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, JAZZ’s share price is trading below the group’s average. This bolsters the proposition that JAZZ’s price is currently discounted.
For Jazz Pharmaceuticals, I’ve compiled three relevant aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Dividend Income vs Capital Gains: Does JAZZ 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 JAZZ as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of JAZZ? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.