Fact based stock research
Hikma Pharmaceuticals (LSE:HIK)

GB00B0LCW083

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Hikma Pharmaceuticals stock research in summary

hikma.com

ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Hikma Pharmaceuticals (Pharmaceuticals, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Hikma Pharmaceuticals are a good value (attractively priced) with a consolidated Value Rank of 78 (better than 78% of alternatives) but show below-average growth (Growth Rank of 32), and are riskily financed (Safety Rank of 46), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Hikma Pharmaceuticals's financial characteristics. As the company Hikma Pharmaceuticals's key financial metrics exhibit good value (Obermatt Value Rank of 78) but low growth (Obermatt Growth Rank of 32) and risky financing practices (Obermatt Safety Rank of 46), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 78% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	78
Growth Rank	32
Safety Rank	46
Combined Rank	60

Country	United Kingdom
Industry	Pharmaceuticals
Index	FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU
Size class	Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Hikma Pharmaceuticals

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	88	81	78
GROWTH
GROWTH	29	21	41	32
SAFETY
SAFETY	43	53	42	46
SENTIMENT
SENTIMENT	n/a	72	90	^new
360° VIEW
360° VIEW	n/a	68	90	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Hikma Pharmaceuticals is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	88	81	78
GROWTH
GROWTH	29	21	41	32
SAFETY
SAFETY	43	53	42	46
COMBINED
COMBINED	77	56	62	60

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Hikma Pharmaceuticals the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% compared with alternatives) for 2024, Hikma Pharmaceuticals shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hikma Pharmaceuticals. Price-to-Profit (also referred to as price-earnings, P/E) is 71 which means that the stock price compared with what market professionals expect for future profits is lower than for 71% of comparable companies, indicating a good value concerning Hikma Pharmaceuticals's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46, which means that the stock price is lower as regards to invested capital than for 46% of comparable investments. On the other hand, Price-to-Sales is less favorable than 51% of alternatives (only 49% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 27% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 78, is a buy recommendation based on Hikma Pharmaceuticals's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	48	75	67	49
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	82	83	75	71
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	43	64	52	46
DIVIDEND YIELD
DIVIDEND YIELD	66	78	76	73
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	64	88	81	78

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hikma Pharmaceuticals; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 32 (better than 32% compared with alternatives), Hikma Pharmaceuticals shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hikma Pharmaceuticals. Sales Growth has a rank of 50 which means that currently professionals expect the company to grow more than 50% of its competitors. Stock Returns are also above average with a rank of 61. But Capital Growth has only a rank of 23, which means that currently professionals expect the company to grow its invested capital less than 77% of its competitors. Profit Growth is also low, with a rank of only 35, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 32, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 61% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	42	59	10	50
PROFIT GROWTH
PROFIT GROWTH	17	56	65	35
CAPITAL GROWTH
CAPITAL GROWTH	n/a	6	25	23
STOCK RETURNS
STOCK RETURNS	36	30	76	61
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	29	21	41	32

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hikma Pharmaceuticals.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company Hikma Pharmaceuticals has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Hikma Pharmaceuticals is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Hikma Pharmaceuticals. Liquidity is at 57, meaning the company generates more profit to service its debt than 57% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 47, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 53% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Hikma Pharmaceuticals has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	34	35	28	40
REFINANCING
REFINANCING	69	60	69	47
LIQUIDITY
LIQUIDITY	88	50	38	57
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	43	53	42	46

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hikma Pharmaceuticals and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	71	51	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	61	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	20	72	^new
MARKET PULSE
MARKET PULSE	n/a	81	77	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	72	90	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hikma Pharmaceuticals.
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