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Attractive stocks have exceptional fundamentals. In the case of Nektar Therapeutics (NASDAQ:NKTR), there's is a financially-robust company with a a great track record of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on Nektar Therapeutics here.
Flawless balance sheet and undervalued
Over the past few years, NKTR has demonstrated a proven ability to generate robust returns of 40% Unsurprisingly, NKTR surpassed the Pharmaceuticals industry return of 23%, which gives us more confidence of the company's capacity to drive earnings going forward. NKTR'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 NKTR has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. NKTR seems to have put its debt to good use, generating operating cash levels of 2.91x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
NKTR 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 NKTR's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the pharmaceuticals industry, NKTR is also trading below its peers, relative to earnings generated. This bolsters the proposition that NKTR's price is currently discounted.
For Nektar Therapeutics, there are three essential aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for NKTR’s future growth? Take a look at our free research report of analyst consensus for NKTR’s outlook.
- Dividend Income vs Capital Gains: Does NKTR 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 NKTR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NKTR? 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.