- By GF Value
The stock of Supernus Pharmaceuticals (NAS:SUPN, 30-year Financials) shows every sign of being modestly undervalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $29.83 per share and the market cap of $1.6 billion, Supernus Pharmaceuticals stock gives every indication of being modestly undervalued. GF Value for Supernus Pharmaceuticals is shown in the chart below.
Because Supernus Pharmaceuticals is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth, which averaged 19.6% over the past five years.
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It is always important to check the financial strength of a company before buying its stock. Investing in companies with poor financial strength have a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a company. Supernus Pharmaceuticals has a cash-to-debt ratio of 0.94, which is in the middle range of the companies in Drug Manufacturers industry. The overall financial strength of Supernus Pharmaceuticals is 6 out of 10, which indicates that the financial strength of Supernus Pharmaceuticals is fair. This is the debt and cash of Supernus Pharmaceuticals over the past years:
It poses less risk to invest in profitable companies, especially those that have demonstrated consistent profitability over the long term. A company with high profit margins is also typically a safer investment than one with low profit margins. Supernus Pharmaceuticals has been profitable 7 over the past 10 years. Over the past twelve months, the company had a revenue of $556.4 million and earnings of $2.07 a share. Its operating margin is 28.91%, which ranks better than 94% of the companies in Drug Manufacturers industry. Overall, GuruFocus ranks the profitability of Supernus Pharmaceuticals at 8 out of 10, which indicates strong profitability. This is the revenue and net income of Supernus Pharmaceuticals over the past years: