Alcon Inc.
Alcon Inc. Fundamental Analysis
Alcon Inc. (ALC) shows weak financial fundamentals with a PE ratio of 38.95, profit margin of 10.28%, and ROE of 4.77%. The company generates $10.2B in annual revenue with moderate year-over-year growth of 4.82%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ALC's fundamental strength across five key dimensions:
Efficiency Score
WeakALC struggles to generate sufficient returns from assets.
Valuation Score
ModerateALC shows balanced valuation metrics.
Growth Score
WeakALC faces weak or negative growth trends.
Financial Health Score
ExcellentALC maintains a strong and stable balance sheet.
Profitability Score
WeakALC struggles to sustain strong margins.
Key Financial Metrics
Is ALC Expensive or Cheap?
P/E Ratio
ALC trades at 38.95 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ALC's PEG of -16.91 indicates potential undervaluation.
Price to Book
The market values Alcon Inc. at 1.85 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 20.94 times EBITDA. This signals the market has high growth expectations.
How Well Does ALC Make Money?
Net Profit Margin
For every $100 in sales, Alcon Inc. keeps $10.28 as profit after all expenses.
Operating Margin
Core operations generate 14.16 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.77 in profit for every $100 of shareholder equity.
ROA
Alcon Inc. generates $3.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Alcon Inc. produces operating cash flow of $2.06B, showing steady but balanced cash generation.
Free Cash Flow
Alcon Inc. generates strong free cash flow of $1.54B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.11 in free cash annually.
FCF Yield
ALC converts 3.74% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
38.95
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-16.91
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.85
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.02
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.24
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.12
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How ALC Stacks Against Its Sector Peers
| Metric | ALC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 38.95 | 29.28 | Worse (Expensive) |
| ROE | 4.77% | 820.00% | Weak |
| Net Margin | 10.28% | -19743.00% (disorted) | Strong |
| Debt/Equity | 0.24 | 0.26 | Neutral |
| Current Ratio | 2.12 | 4.69 | Strong Liquidity |
| ROA | 3.32% | -17807.00% (disorted) | Weak |
ALC outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Alcon Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.35%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
253.24%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
122.93%
Industry Style: Defensive, Growth, Innovation
High Growth