Is Horizon Therapeutics Public (HZNP) Overpriced?

Horizon Therapeutics Public may be overvalued with strong growth indicators, but the 11 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $74 to $140 per share, for an average of $116.14. At today's price of $111.06, Horizon Therapeutics Public is trading -4.37% away from its average target price, suggesting there is an analyst consensus of some upside potential.

Horizon Therapeutics Public Limited Company, a biotechnology company, focuses on the discovery, development, and commercialization of medicines that address critical needs for people impacted by rare, autoimmune, and severe inflammatory diseases. Based in Dublin, Ireland, the large-cap Healthcare company has 2,095 full time employees. Horizon Therapeutics Public has not offered a regular dividend during the last year.

Horizon Therapeutics Public has a trailing twelve month P/E ratio of 46.3, compared to an average of 13.21 for the Healthcare sector. Based on its EPS guidance of 5.41, the company has a forward P/E ratio of 20.5. Based on the average annual growth rate of Horizon Therapeutics Public's historical and projected earnings per share, which is 41.67%, the company's PEG ratio is 1.11. This implies that the shares are fairly valued.

In contrast, Horizon Therapeutics Public is likely overvalued compared to its book value, since its P/B ratio of 5.0 is higher than the sector average of 4.07. The company's shares are currently trading 226.9% above their Graham number, implying that they are overvalued in terms of earnings and book value.

If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. They might also believe that Horizon Therapeutics Public's positive margin growth trend will continue.

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $1,300 $2,200 $3,226
Revenue Growth n/a 69.26% 46.63%
Gross Margins 72.1% 75.8% 75.4%
Gross Margins Growth n/a 5.13% -0.53%
Operating Margins 10.6% 22.0% 17.2%
Operating Margins Growth n/a 107.55% -21.82%
Earnings Per Share $2.9 $1.81 $2.27
EPS Growth n/a -37.59% 25.41%
Free Cash Flow (MM) $408 $356 $909
FCF Growth n/a -12.89% 155.48%
Capital Expenditures (MM) -$18 -$200 -$126
Net Debt / EBITDA 0.74 -1.4 1.09
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.