West Pharmaceutical Services, Inc.
West Pharmaceutical Services, Inc. Fundamental Analysis
West Pharmaceutical Services, Inc. (WST) shows weak financial fundamentals with a PE ratio of 35.65, profit margin of 16.06%, and ROE of 16.68%. The company generates $3.1B in annual revenue with weak year-over-year growth of -1.98%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 65.5/100 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 WST's fundamental strength across five key dimensions:
Efficiency Score
ExcellentWST demonstrates superior asset utilization.
Valuation Score
WeakWST trades at a premium to fair value.
Growth Score
WeakWST faces weak or negative growth trends.
Financial Health Score
ExcellentWST maintains a strong and stable balance sheet.
Profitability Score
ExcellentWST achieves industry-leading margins.
Key Financial Metrics
Is WST Expensive or Cheap?
P/E Ratio
WST trades at 35.65 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, WST's PEG of 60.52 indicates potential overvaluation.
Price to Book
The market values West Pharmaceutical Services, Inc. at 5.54 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 23.20 times EBITDA. This signals the market has high growth expectations.
How Well Does WST Make Money?
Net Profit Margin
For every $100 in sales, West Pharmaceutical Services, Inc. keeps $16.06 as profit after all expenses.
Operating Margin
Core operations generate 20.07 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.68 in profit for every $100 of shareholder equity.
ROA
West Pharmaceutical Services, Inc. generates $11.56 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
West Pharmaceutical Services, Inc. produces operating cash flow of $751.89M, showing steady but balanced cash generation.
Free Cash Flow
West Pharmaceutical Services, Inc. generates strong free cash flow of $467.09M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.49 in free cash annually.
FCF Yield
WST converts 2.67% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.65
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
60.52
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.54
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.70
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.10
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.02
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How WST Stacks Against Its Sector Peers
| Metric | WST Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.65 | 29.28 | Worse (Expensive) |
| ROE | 16.68% | 820.00% | Weak |
| Net Margin | 16.06% | -19731.00% (disorted) | Strong |
| Debt/Equity | 0.10 | 0.26 | Strong (Low Leverage) |
| Current Ratio | 3.02 | 4.69 | Strong Liquidity |
| ROA | 11.56% | -17993.00% (disorted) | Strong |
WST outperforms its industry in 4 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 West Pharmaceutical Services, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.05%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
106.64%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
80.38%
Industry Style: Defensive, Growth, Innovation
High Growth