West Pharmaceutical Services Inc

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WST : NYSE : Health Care
$84.57 -1.3 | -1.5%
Today's Range: 84.54 - 85.38
Avg. Daily Volume: 344400.0
08/23/17 - 3:59 PM ET

Financial Analysis


WEST PHARMACEUTICAL SVSC INC's gross profit margin for the second quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. WEST PHARMACEUTICAL SVSC INC has strong liquidity. Currently, the Quick Ratio is 1.62 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 11.98% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)397.6388.0
EBITDA ($mil)77.984.7
EBIT ($mil)54.462.0
Net Income ($mil)38.844.8


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)226.6202.7
Total Assets ($mil)1843.01705.1
Total Debt ($mil)229.5231.4
Equity ($mil)1242.41109.4


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin37.3540.21
EBITDA Margin19.5921.82
Operating Margin13.6815.98
Sales Turnover0.840.85
Return on Assets9.575.97
Return on Equity14.199.17
Debt Q2 FY17 Q2 FY16
Current Ratio2.482.75
Debt/Capital0.160.17
Interest Expense2.82.8
Interest Coverage19.4322.14


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)74.073.22
Div / share0.130.12
EPS0.510.6
Book value / share16.7915.15
Institutional Own % n/a n/a
Avg Daily Volume334948.0377032.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 47.77 for the Health Care Equipment & Supplies industry and a significant premium compared to the S&P 500 average of 24.23. Conducting a second comparison, its price-to-book ratio of 5.08 indicates a significant premium versus the S&P 500 average of 3.02 and a premium versus the industry average of 4.79. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, WEST PHARMACEUTICAL SVSC INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WST 36.46 Peers 47.77   WST 25.45 Peers 37.41

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WST is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WST is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WST 29.17 Peers 32.84   WST 0.89 Peers 1.00

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WST is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WST trades at a discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WST 5.08 Peers 4.79   WST 70.80 Peers 34.43

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WST is trading at a valuation on par with its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

WST is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WST 4.09 Peers 5.07   WST 6.18 Peers 11.44

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WST is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WST significantly trails its peers on the basis of sales growth

 

 

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