HUTCHMED (China) Limited

NasdaqGS:HCM Stock Report

Market Cap: US$3.0b

HUTCHMED (China) Valuation

Is HCM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HCM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HCM ($17.38) is trading below our estimate of fair value ($53.16)

Significantly Below Fair Value: HCM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HCM?

Key metric: As HCM is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for HCM. This is calculated by dividing HCM's market cap by their current revenue.
What is HCM's PS Ratio?
PS Ratio4.8x
SalesUS$610.81m
Market CapUS$2.96b

Price to Sales Ratio vs Peers

How does HCM's PS Ratio compare to its peers?

The above table shows the PS ratio for HCM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average15.7x
TARS Tarsus Pharmaceuticals
14.6x38.0%US$1.8b
WVE Wave Life Sciences
42.2x42.4%US$2.3b
HRMY Harmony Biosciences Holdings
2.9x18.4%US$2.0b
AMPH Amphastar Pharmaceuticals
2.9x7.8%US$2.1b
HCM HUTCHMED (China)
4.8x18.0%US$2.4b

Price-To-Sales vs Peers: HCM is good value based on its Price-To-Sales Ratio (4.8x) compared to the peer average (15.7x).

Price to Sales Ratio vs Industry

How does HCM's PS Ratio compare vs other companies in the US Pharmaceuticals Industry?

70 CompaniesPrice / SalesEstimated GrowthMarket Cap
OGN Organon
0.6x-0.06%US$4.16b
PRGO Perrigo
0.9x3.4%US$3.87b
BHC Bausch Health Companies
0.3x1.5%US$2.92b
AMRX Amneal Pharmaceuticals
1x5.6%US$2.60b
HCM 4.8xIndustry Avg. 2.9xNo. of Companies70PS048121620+
70 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: HCM is expensive based on its Price-To-Sales Ratio (4.8x) compared to the US Pharmaceuticals industry average (2.9x).

Price to Sales Ratio vs Fair Ratio

What is HCM's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HCM PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio4.8x
Fair PS Ratio3.9x

Price-To-Sales vs Fair Ratio: HCM is expensive based on its Price-To-Sales Ratio (4.8x) compared to the estimated Fair Price-To-Sales Ratio (3.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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