HUTCHMED (China) Limited Fundamental Analysis (NASDAQ: HCM)
HUTCHMED (China) Limited Fundamental Analysis (NASDAQ: HCM)
HUTCHMED (China) Limited (NASDAQ: HCM) shows weak financial fundamentals with a PE ratio of 125.26, profit margin of 3.26%, and ROE of 1.43%. The company generates $0.6B in annual revenue with weak year-over-year growth of -12.96%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 20.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HCM's fundamental strength across five key dimensions:
Efficiency Score
WeakHCM struggles to generate sufficient returns from assets.
Valuation Score
ModerateHCM shows balanced valuation metrics.
Growth Score
ModerateHCM shows steady but slowing expansion.
Financial Health Score
ExcellentHCM maintains a strong and stable balance sheet.
Profitability Score
ModerateHCM maintains healthy but balanced margins.
Key Financial Metrics
Is HCM Expensive or Cheap?
P/E Ratio
HCM trades at 125.26 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HCM's PEG of -1.30 indicates potential undervaluation.
Price to Book
The market values HUTCHMED (China) Limited at 1.69 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -104.98 times EBITDA. This is generally considered low.
How Well Does HCM Make Money?
Net Profit Margin
For every $100 in sales, HUTCHMED (China) Limited keeps $3.26 as profit after all expenses.
Operating Margin
Core operations generate -6.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.43 in profit for every $100 of shareholder equity.
ROA
HUTCHMED (China) Limited generates $1.03 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
HUTCHMED (China) Limited generates limited operating cash flow of $20.61M, signaling weaker underlying cash strength.
Free Cash Flow
HUTCHMED (China) Limited generates weak or negative free cash flow of $10.02M, restricting financial flexibility.
FCF Per Share
Each share generates $0.06 in free cash annually.
FCF Yield
HCM converts 0.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
125.26
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.30
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.69
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.90
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.07
vs 25 benchmark
Current Ratio
Current assets to current liabilities
5.64
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.01
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
-0.02
vs 25 benchmark
How HCM Stacks Against Its Sector Peers
| Metric | HCM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 125.26 | 31.56 | Worse (Expensive) |
| ROE | 1.43% | 441.00% | Weak |
| Net Margin | 3.26% | 18300.00% | Weak |
| Debt/Equity | 0.07 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 5.64 | 5.63 | Strong Liquidity |
| ROA | 1.03% | 1512.00% | Weak |
HCM outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews HUTCHMED (China) Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
91.11%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
388.65%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
17.13%
Industry Style: Defensive, Growth, Innovation
High Growth