Taro Pharmaceutical Industries Ltd.
Taro Pharmaceutical Industries Ltd. Fundamental Analysis
Taro Pharmaceutical Industries Ltd. (TARO) shows weak financial fundamentals with a PE ratio of 29.99, profit margin of 8.56%, and ROE of 3.06%. The company generates $0.6B in annual revenue with moderate year-over-year growth of 9.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 52.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TARO's fundamental strength across five key dimensions:
Efficiency Score
WeakTARO struggles to generate sufficient returns from assets.
Valuation Score
ModerateTARO shows balanced valuation metrics.
Growth Score
ModerateTARO shows steady but slowing expansion.
Financial Health Score
ExcellentTARO maintains a strong and stable balance sheet.
Profitability Score
WeakTARO struggles to sustain strong margins.
Key Financial Metrics
Is TARO Expensive or Cheap?
P/E Ratio
TARO trades at 29.99 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TARO's PEG of 0.30 indicates potential undervaluation.
Price to Book
The market values Taro Pharmaceutical Industries Ltd. at 0.90 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 51.51 times EBITDA. This signals the market has high growth expectations.
How Well Does TARO Make Money?
Net Profit Margin
For every $100 in sales, Taro Pharmaceutical Industries Ltd. keeps $8.56 as profit after all expenses.
Operating Margin
Core operations generate 3.42 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $3.06 in profit for every $100 of shareholder equity.
ROA
Taro Pharmaceutical Industries Ltd. generates $2.49 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Taro Pharmaceutical Industries Ltd. produces operating cash flow of $132.39M, showing steady but balanced cash generation.
Free Cash Flow
Taro Pharmaceutical Industries Ltd. generates strong free cash flow of $78.17M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.08 in free cash annually.
FCF Yield
TARO converts 4.84% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
29.99
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.30
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.90
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.57
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.00
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.01
vs 25 benchmark
How TARO Stacks Against Its Sector Peers
| Metric | TARO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 29.99 | 29.43 | Neutral |
| ROE | 3.06% | 800.00% | Weak |
| Net Margin | 8.56% | -20145.00% (disorted) | Weak |
| Debt/Equity | 0.00 | 0.30 | Strong (Low Leverage) |
| Current Ratio | 3.61 | 4.64 | Strong Liquidity |
| ROA | 2.49% | -17936.00% (disorted) | Weak |
TARO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Taro Pharmaceutical Industries Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-2.57%
Industry Style: Defensive, Growth, Innovation
DecliningEPS CAGR
-80.17%
Industry Style: Defensive, Growth, Innovation
DecliningFCF CAGR
-57.57%
Industry Style: Defensive, Growth, Innovation
Declining