It's been a great afternoon session for Jazz Pharmaceuticals investors, who saw their shares rise 19.0% to a price of $167.92 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Jazz Pharmaceuticals's Valuation Is in Line With Its Sector Averages:
Jazz Pharmaceuticals plc identifies, develops, and commercializes pharmaceutical products in the United States, Europe, and internationally. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 22.94 and an average price to book (P/B) ratio of 3.19. In contrast, Jazz Pharmaceuticals has a trailing 12 month P/E ratio of -27.3 and a P/B ratio of 2.58.
Jazz Pharmaceuticals has moved 20.0% over the last year compared to 14.3% for the S&P 500 — a difference of 5.7%. Jazz Pharmaceuticals has a 52 week high of $172.91 and a 52 week low of $95.49.
Increasing Revenues but Narrowing Margins:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $2,162 | $2,364 | $3,094 | $3,659 | $3,834 | $4,069 |
| Operating Margins | 25% | 16% | 6% | -2% | 15% | 18% |
| Net Margins | 24% | 10% | -11% | -6% | 11% | 14% |
| Net Income (M) | $523 | $239 | -$330 | -$224 | $415 | $560 |
| Net Interest Expense (M) | -$72 | -$100 | -$279 | -$288 | -$289 | -$238 |
| Depreciation & Amort. (M) | $15 | $19 | $27 | $30 | $30 | $33 |
| Diluted Shares (M) | 58 | 57 | 60 | 63 | 72 | 66 |
| Earnings Per Share | $9.09 | $4.22 | -$5.52 | -$3.58 | $6.1 | $8.65 |
| EPS Growth | n/a | -53.58% | -230.81% | 35.14% | 270.39% | 41.8% |
| Avg. Price | $133.78 | $128.26 | $154.89 | $149.9 | $123.0 | $170.09 |
| P/E Ratio | 14.51 | 29.97 | -28.06 | -41.87 | 18.78 | 18.77 |
| Free Cash Flow (M) | $736 | $885 | $751 | $1,243 | $1,068 | $1,358 |
| CAPEX (M) | $40 | $15 | $28 | $29 | $24 | $38 |
| EV / EBITDA | 18.58 | 25.42 | 102.55 | -561.83 | 28.09 | 27.19 |
| Total Debt (M) | $3,181 | $3,943 | $12,069 | $11,418 | $10,821 | $12,186 |
| Net Debt / EBITDA | 4.64 | 7.27 | 58.26 | -299.1 | 15.3 | 13.04 |
| Current Ratio | 4.47 | 4.34 | 3.23 | 2.79 | 2.24 | 4.46 |
Jazz Pharmaceuticals has rapidly growing revenues and a flat capital expenditure trend, generally positive cash flows, and an excellent current ratio of 4.46. However, the firm has a highly leveraged balance sheet. Finally, we note that Jazz Pharmaceuticals has decent operating margins with a negative growth trend and flat EPS growth.
