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 | 36.62 | 5.77 | 4.80 | 3.68% | $3.33 | $9.4 | 4.64% |
| Eli Lilly and Co | 113.41 | 52.97 | 17.64 | -0.52% | $0.96 | $7.64 | 36.84% |
| Novo Nordisk A/S | 43.38 | 34.77 | 15.24 | 24.5% | $32.76 | $49.02 | 28.89% |
| Johnson & Johnson | 30.31 | 5.46 | 4.28 | 35.56% | $7.24 | $14.74 | 6.78% |
| Merck & Co Inc | 65.21 | 7.21 | 5.04 | 11.87% | $6.95 | $11.7 | 6.71% |
| Novartis AG | 27.74 | 5.77 | 4.17 | 3.91% | $4.88 | $8.97 | 12.14% |
| Pfizer Inc | 16.16 | 1.72 | 2.47 | -2.43% | $-1.1 | $3.96 | -41.55% |
| Bristol-Myers Squibb Co | 13.14 | 3.63 | 2.42 | 6.32% | $4.85 | $8.46 | -2.25% |
| Zoetis Inc | 39.95 | 17.73 | 10.87 | 12.28% | $0.9 | $1.51 | 7.44% |
| GSK PLC | 10.52 | 4.88 | 2.16 | 11.34% | $2.55 | $5.88 | 4.06% |
| Takeda Pharmaceutical Co Ltd | 35.38 | 0.95 | 1.63 | -0.69% | $202.28 | $699.51 | 4.07% |
| Viatris Inc | 7.75 | 0.67 | 0.92 | 1.59% | $1.22 | $1.69 | -3.34% |
| Dr Reddy's Laboratories Ltd | 19.02 | 3.82 | 3.63 | 5.94% | $23.28 | $40.37 | 9.11% |
| Jazz Pharmaceuticals PLC | 151.12 | 2.26 | 2.30 | 4.19% | $0.33 | $0.87 | 3.35% |
| Amphastar Pharmaceuticals Inc | 23.21 | 4.78 | 5.21 | 8.31% | $0.09 | $0.11 | 50.3% |
| Corcept Therapeutics Inc | 34.27 | 6.12 | 6.89 | 7.06% | $0.03 | $0.12 | 21.5% |
| Average | 42.04 | 10.18 | 5.66 | 8.62% | $19.15 | $56.97 | 9.6% |
Through a thorough examination of AstraZeneca, we can discern the following trends:
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At 36.62, the stock's Price to Earnings ratio is 0.87x less than the industry average, suggesting favorable growth potential.
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The current Price to Book ratio of 5.77, which is 0.57x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The Price to Sales ratio is 4.8, which is 0.85x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 3.68% is 4.94% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.33 Billion, which is 0.17x below the industry average, the company may face lower profitability or financial challenges.
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The gross profit of $9.4 Billion is 0.16x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 4.64% is significantly below the industry average of 9.6%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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.
When assessing AstraZeneca against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Compared to its top 4 peers, AstraZeneca has a stronger financial position indicated by its lower debt-to-equity ratio of 0.77.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
AstraZeneca's low PE, PB, and PS ratios indicate that the company's stock is undervalued compared to its peers in the Pharmaceuticals industry. This suggests that investors may find AstraZeneca's shares to be attractively priced relative to its earnings, book value, and sales. Additionally, AstraZeneca's low ROE, EBITDA, gross profit, and revenue growth indicate that the company's financial performance is weaker compared to its industry peers. This suggests that AstraZeneca may need to improve its profitability and revenue generation to remain competitive in the Pharmaceuticals sector.
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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