In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing AstraZeneca AZN alongside its primary competitors in the Pharmaceuticals industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 | 31.35 | 5.13 | 4.34 | 4.97% | $3.79 | $9.46 | 5.99% |
| Eli Lilly and Co | 78.03 | 48.07 | 17.16 | 15.85% | $2.58 | $6.5 | 28.12% |
| Novo Nordisk A/S | 44.37 | 32.63 | 14.82 | 22.81% | $26.71 | $46.44 | 31.59% |
| Novartis AG | 23.90 | 4.97 | 3.60 | 3.91% | $4.88 | $8.97 | 12.14% |
| Pfizer Inc | 8.01 | 1.72 | 2.21 | 2.33% | $4.35 | $9.5 | -54.1% |
| Sanofi SA | 11.92 | 1.41 | 2.21 | 1.98% | $2.53 | $7.41 | -0.56% |
| Bristol-Myers Squibb Co | 13.57 | 3.25 | 2.39 | 6.5% | $4.57 | $8.35 | -5.56% |
| Zoetis Inc | 32.85 | 15.53 | 8.84 | 14.72% | $1.05 | $1.57 | 6.24% |
| GSK PLC | 11.27 | 4.61 | 2 | 13.25% | $2.62 | $5.25 | 3.59% |
| Takeda Pharmaceutical Co Ltd | 33.32 | 0.90 | 1.53 | -0.69% | $190.78 | $699.51 | 4.07% |
| Dr Reddy's Laboratories Ltd | 19.07 | 3.68 | 3.45 | 5.89% | $22.4 | $39.55 | 29.2% |
| Viatris Inc | 5.73 | 0.50 | 0.68 | 1.26% | $1.16 | $1.61 | -4.81% |
| Average | 25.64 | 10.66 | 5.35 | 7.98% | $23.97 | $75.88 | 4.54% |
When conducting a detailed analysis of AstraZeneca, the following trends become clear:
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The current Price to Earnings ratio of 31.35 is 1.22x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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Considering a Price to Book ratio of 5.13, which is well below the industry average by 0.48x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively low Price to Sales ratio of 4.34, which is 0.81x the industry average, the stock might be considered undervalued based on sales performance.
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With a Return on Equity (ROE) of 4.97% that is 3.01% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.79 Billion, which is 0.16x below the industry average, the company may face lower profitability or financial challenges.
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The company has lower gross profit of $9.46 Billion, which indicates 0.12x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 5.99% exceeds the industry average of 4.54%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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 terms of the Debt-to-Equity ratio, AstraZeneca can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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In terms of the debt-to-equity ratio, AstraZeneca has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity 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 low PB and PS ratios suggest that the company's stock is undervalued in terms of its book value and sales.
In terms of profitability, AstraZeneca has a low ROE, indicating that it is not generating significant returns on shareholders' equity. The low EBITDA and gross profit suggest that the company's operating performance is weak. However, AstraZeneca shows high revenue growth compared to its peers, indicating potential future growth opportunities.
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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