Tag Archives: NASDAQ:ESRX

Is Express Scripts Priced at a Value?

Express Scripts Holding Company (NASDAQ:ESRX) has declined 12% year to date. So, it maybe a good time to see if it’s priced at a value.

Quality shares

Express Scripts has an investment-grade S&P credit rating of BBB+. Furthermore, its long-term earnings per share (EPS) growth has been wonderful. The company doesn’t pay a dividend, but it has been buying back its shares in recent quarters. It repurchased $1,132.5 million worth of shares in the third quarter.

Over time the pharmacy benefit manager has been consistently growing its profits, signified by its growing net income, earnings per share, and free cash flow, but it’d be even better if it can boost its revenues, which have stagnated at roughly $100 billion since 2013.

Although its EPS growth is expected to slow down to 8% next year (compared to this year’s estimated 16% growth), it’d still be pretty good growth.

Recent results

The following data compares the results of the first three quarters with that of the same period last year. Express Scripts generated revenues of $75,424 million, which was essentially flat compared to the previous year.

Yet, its gross profit and operating income were higher. Ultimately, the PBM managed to earn net income of $1,969 million, which was 15% higher. As a result, Express Scripts’s diluted EPS were $3.09, up 27%.

At the end of the quarter, the company had cash and cash equivalents of $2,304.7 million. Read More