In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating AstraZeneca AZN and its primary competitors in the Pharmaceuticals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
AstraZeneca Background
A merger between Astra of Sweden and Zeneca Group of the United Kingdom formed AstraZeneca in 1999. The firm sells branded drugs across several major therapeutic classes, including gastrointestinal, diabetes, cardiovascular, respiratory, cancer, immunology and rare diseases. The majority of sales come from international markets with the United States representing close to one third of its revenue.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| AstraZeneca PLC | 34.10 | 5.58 | 4.72 | 4.97% | $3.79 | $9.46 | 5.99% |
| Eli Lilly and Co | 84.85 | 52.27 | 18.66 | 15.85% | $2.58 | $6.5 | 28.12% |
| Novo Nordisk A/S | 48.17 | 35.44 | 16.09 | 22.81% | $26.71 | $46.44 | 31.59% |
| Johnson & Johnson | 31.82 | 5.03 | 4.24 | 7.05% | $9.04 | $17.32 | 6.29% |
| Merck & Co Inc | 85.25 | 6.82 | 4.54 | -13.97% | $-4.16 | $11.01 | 3.03% |
| Novartis AG | 27.01 | 3.88 | 3.92 | 4.46% | $4.82 | $9.6 | 6.5% |
| Pfizer Inc | 8.54 | 1.83 | 2.36 | 2.33% | $4.35 | $9.5 | -54.1% |
| Sanofi SA | 14.98 | 1.77 | 2.78 | 1.98% | $2.53 | $7.41 | -0.56% |
| Bristol-Myers Squibb Co | 15.02 | 3.69 | 2.65 | 6.5% | $4.57 | $8.35 | -5.56% |
| Zoetis Inc | 36.71 | 17.36 | 9.88 | 14.72% | $1.05 | $1.57 | 6.24% |
| GSK PLC | 11.75 | 4.81 | 2.08 | 13.25% | $2.62 | $5.25 | 3.59% |
| Takeda Pharmaceutical Co Ltd | 23.57 | 1.01 | 1.73 | 1.35% | $366.11 | $737.5 | 8.86% |
| Viatris Inc | 6.10 | 0.54 | 0.72 | 1.26% | $1.16 | $1.61 | -4.81% |
| Dr Reddy's Laboratories Ltd | 19.49 | 3.75 | 3.52 | 5.89% | $22.4 | $39.55 | 29.2% |
| Corcept Therapeutics Inc | 34.02 | 6.70 | 7.38 | 5.75% | $0.03 | $0.12 | 13.86% |
| Average | 31.95 | 10.35 | 5.75 | 6.37% | $31.7 | $64.41 | 5.16% |
After examining AstraZeneca, the following trends can be inferred:
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At 34.1, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.07x, suggesting a premium valuation relative to industry peers.
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Considering a Price to Book ratio of 5.58, which is well below the industry average by 0.54x, the stock may be undervalued based on its book value compared to its peers.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.72, which is 0.82x the industry average.
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The Return on Equity (ROE) of 4.97% is 1.4% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.79 Billion, which is 0.12x below the industry average, potentially indicating lower profitability or financial challenges.
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With lower gross profit of $9.46 Billion, which indicates 0.15x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 5.99%, outperforming the industry average of 5.16%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between AstraZeneca and its top 4 peers reveals the following information:
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When comparing the debt-to-equity ratio, AstraZeneca is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.8.
Key Takeaways
AstraZeneca has a high PE ratio compared to its peers in the Pharmaceuticals industry, indicating that the stock may be overvalued. The company also has a low PB ratio, suggesting that it may be undervalued based on its book value. Additionally, AstraZeneca has a low PS ratio, indicating that the stock may be undervalued relative to its sales.
In terms of profitability, AstraZeneca has a low ROE, suggesting that the company is not generating strong returns on shareholder equity. The company also has a low EBITDA and gross profit, indicating potential weaknesses in its operational efficiency and profitability. However, AstraZeneca shows high revenue growth compared to its peers, suggesting potential future growth opportunities for the company.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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