Indivior PLC (INDV, Financial) saw a daily gain of 5.38%, despite a 3-month loss of -22.5%. With an Earnings Per Share (EPS) (EPS) of 0.64, the question arises: is the stock significantly undervalued? This article aims to answer this question by analyzing the company's financial metrics and comparing them to the GF Value. Let's delve into an in-depth evaluation of Indivior PLC (INDV).
About Indivior PLC
Indivior PLC is a specialty and generic drug manufacturing company, primarily focusing on the development, manufacture, and sale of prescription drugs based on buprenorphine for treatment of opioid dependence. The company generates the majority of its revenue in the United States, followed by the rest of the world. It considers merger and acquisition investment as a potential component of its operational growth strategy for expanding its research, development, manufacturing, and marketing capabilities.
Currently, Indivior PLC's stock price stands at $19.6 per share, with a market cap of $2.70 billion. However, the GF Value, an estimation of fair value, is $28.65, indicating that the stock may be significantly undervalued.
Understanding the GF Value of Indivior PLC
The GF Value is a proprietary measure that represents the current intrinsic value of a stock. It is derived from historical trading multiples, a GuruFocus adjustment factor based on the company's past performance and growth, and future estimates of business performance. The GF Value Line provides an overview of the fair value at which the stock should ideally be traded.
According to GuruFocus Value calculation, Indivior PLC (INDV, Financial) is estimated to be significantly undervalued. Given its current price of $19.6 per share and the market cap of $2.70 billion, the stock is projected to offer higher future returns due to its significant undervaluation.
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Indivior PLC's Financial Strength
Investing in companies with low financial strength could result in permanent capital loss. Therefore, a careful review of a company's financial strength is crucial before deciding to buy shares. Indivior PLC has a cash-to-debt ratio of 2.45, which ranks better than 62.96% of 1042 companies in the Drug Manufacturers industry. Based on this, GuruFocus ranks Indivior PLC's financial strength as 5 out of 10, suggesting a fair balance sheet.
Profitability and Growth of Indivior PLC
Investing in profitable companies, especially those with consistent profitability over the long term, is less risky. Indivior PLC has been profitable 8 over the past 10 years. Over the past twelve months, the company had a revenue of $1 billion and an Earnings Per Share (EPS) of $0.64. Its operating margin is -6.99%, which ranks worse than 70.86% of 1033 companies in the Drug Manufacturers industry. Overall, the profitability of Indivior PLC is ranked 7 out of 10, indicating fair profitability.
One of the most important factors in the valuation of a company is its growth. The average annual revenue growth of Indivior PLC is 8.6%, which ranks better than 58.5% of 918 companies in the Drug Manufacturers industry. However, the 3-year average EBITDA growth is 0%, which ranks worse than 0% of 883 companies in the Drug Manufacturers industry.
Evaluating ROIC vs WACC
Another way to evaluate a company's profitability is to compare its return on invested capital (ROIC) to its weighted cost of capital (WACC). Over the past 12 months, Indivior PLC's ROIC was -3.81, while its WACC came in at 7.01. If the ROIC is higher than the WACC, it indicates that the company is creating value for shareholders.
Conclusion
In conclusion, the stock of Indivior PLC (INDV, Financial) is estimated to be significantly undervalued. The company's financial condition is fair, and its profitability is fair. However, its growth ranks worse than 0% of 883 companies in the Drug Manufacturers industry. To learn more about Indivior PLC stock, you can check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
