In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating AstraZeneca AZN against its key competitors in the Pharmaceuticals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for 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 | 35.07 | 5.52 | 4.60 | 3.68% | $3.33 | $9.4 | 4.64% |
| Eli Lilly and Co | 103.33 | 48.26 | 16.07 | -0.52% | $0.96 | $7.64 | 36.84% |
| Novo Nordisk A/S | 41.62 | 33.36 | 14.62 | 24.5% | $32.76 | $49.02 | 28.89% |
| Johnson & Johnson | 29.17 | 5.25 | 4.12 | 35.56% | $7.24 | $14.74 | 6.78% |
| Merck & Co Inc | 59.83 | 6.62 | 4.63 | 11.87% | $6.95 | $11.7 | 6.71% |
| Novartis AG | 25.58 | 5.32 | 3.85 | 3.91% | $4.88 | $8.97 | 12.14% |
| Pfizer Inc | 15.52 | 1.65 | 2.37 | -2.43% | $-1.1 | $3.96 | -41.55% |
| Bristol-Myers Squibb Co | 13.27 | 3.67 | 2.44 | 6.32% | $4.85 | $8.46 | -2.25% |
| Zoetis Inc | 39.71 | 17.63 | 10.81 | 12.28% | $0.9 | $1.51 | 7.44% |
| GSK PLC | 9.85 | 4.57 | 2.02 | 11.34% | $2.55 | $5.88 | 4.06% |
| Takeda Pharmaceutical Co Ltd | 32.90 | 0.89 | 1.51 | -0.69% | $202.28 | $699.51 | 4.07% |
| Viatris Inc | 7.05 | 0.61 | 0.83 | 1.59% | $1.22 | $1.69 | -3.34% |
| Dr Reddy's Laboratories Ltd | 18.32 | 3.68 | 3.49 | 5.94% | $23.28 | $40.37 | 9.11% |
| Jazz Pharmaceuticals PLC | 146.08 | 2.19 | 2.23 | 4.19% | $0.33 | $0.87 | 3.35% |
| Corcept Therapeutics Inc | 40.95 | 7.31 | 8.24 | 7.06% | $0.03 | $0.12 | 21.5% |
| Amphastar Pharmaceuticals Inc | 23.80 | 4.90 | 5.34 | 8.31% | $0.09 | $0.11 | 50.3% |
| Average | 40.47 | 9.73 | 5.5 | 8.62% | $19.15 | $56.97 | 9.6% |
By conducting a comprehensive analysis of AstraZeneca, the following trends become evident:
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A Price to Earnings ratio of 35.07 significantly below the industry average by 0.87x suggests undervaluation. This can make the stock appealing for those seeking growth.
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Considering a Price to Book ratio of 5.52, which is well below the industry average by 0.57x, the stock may be undervalued based on its book value compared to its peers.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.6, which is 0.84x the industry average.
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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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Compared to its industry, the company has lower gross profit of $9.4 Billion, which indicates 0.16x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 4.64% is significantly lower compared to the industry average of 9.6%. This indicates a potential fall in the company's sales performance.
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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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 0.77.
Key Takeaways
AstraZeneca's low PE, PB, and PS ratios suggest that the company's stock is undervalued compared to its peers in the Pharmaceuticals industry. The low ROE indicates that AstraZeneca's profitability is relatively low compared to its peers. The low EBITDA suggests that the company's operating performance is weaker compared to its industry peers. The low gross profit and revenue growth indicate that AstraZeneca's financial performance and growth potential are lower compared to its industry peers.
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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