Innoviva Inc (NASDAQ:INVA) stands out in the current market environment as a potential candidate for investors seeking growth at a reasonable price. The Affordable Growth screen is designed to identify companies that combine solid earnings and revenue expansion with sensible valuation metrics, avoiding the trap of paying excessive premiums for future potential. This approach, often referred to as GARP (Growth at a Reasonable Price), is particularly relevant now when both the long-term and short-term trends for the S&P 500 are positive, as investors look for stocks that can deliver sustainable gains without being overhyped. The methodology filters for stocks with a ChartMill Growth rating above 7, a Valuation rating above 5, and decent Health and Profitability scores, ensuring a balanced profile that doesn't sacrifice financial stability for growth.
Growth: Strong Momentum with Accelerating Trends
Innoviva receives a solid Growth rating of 7 out of 10 from ChartMill, a score that justifies its place in the Affordable Growth screen. Over the past year, earnings per share have surged by 470.30%, a figure that highlights the company's operational leverage and ability to turn revenue into profit. Revenue growth is also strong, coming in at 13.75% annually, while the longer-term EPS growth rate sits at a respectable 8.59% per year. Looking forward, analysts expect this momentum to continue: average annual EPS growth is projected at 21.11%, with revenue growth of 9.93%. Importantly, the data shows that growth is accelerating—both EPS and revenue trends are expected to pick up pace compared to historical performance. This is a key criterion for the Affordable Growth screen, as it suggests the company is not merely riding a temporary wave but is building a stronger business trajectory.
Valuation: Rarely This Cheap for Such Growth
The standout feature of Innoviva is its Valuation rating of 9 out of 10, making it one of the most attractively priced stocks in its industry. The trailing Price/Earnings ratio of 6.05 is dramatically lower than both the industry average of 36.95 and the S&P 500’s 26.41, placing Innoviva in the cheapest 5% of its peer group. The forward P/E of 9.83 still represents a steep discount compared to the broader market’s 20.80. When examining the Enterprise Value to EBITDA ratio, Innoviva is cheaper than 95% of industry peers, and its Price/Free Cash Flow ratio is similarly favorable. This combination of low multiples and strong growth—reflected in a low PEG ratio—is exactly what the Affordable Growth screen targets. It indicates that investors are not paying a premium for the company’s expansion, which can provide a margin of safety in a rising market.
Health and Profitability: A Solid Foundation
While growth and valuation are the primary drivers in this screen, financial health and profitability are essential supporting criteria. Innoviva performs well here with a Health rating of 8 and a Profitability rating of 7. The company holds an Altman-Z score of 3.37, well above the threshold for financial safety, and a debt-to-free-cash-flow ratio of just 1.50—meaning it could theoretically pay off all its debt in under two years using free cash flow. Liquidity is also exceptional: the current and quick ratios stand at 21.13 and 20.07 respectively, far exceeding industry norms. On the profitability front, return on equity is 37.59%, profit margins are an extraordinary 119.88% (reflecting efficient operations and royalty-based revenue), and operating margins sit at 38.14%. These metrics demonstrate that Innoviva is not only growing but doing so from a position of financial strength, reducing the risk that often accompanies high-growth stocks.
A Balanced Pick for GARP Investors
For those looking to combine growth potential with reasonable valuation, Innoviva checks all the right boxes. The stock scores high on growth acceleration, is remarkably cheap relative to its sector and the broader market, and maintains excellent financial health and profitability. The Affordable Growth screen is specifically designed to uncover such setups—stocks that can compound earnings without demanding an inflated price tag. You can review the full fundamental analysis and detailed scores on ChartMill’s dedicated fundamental analysis page for INVA.
Where to Find Similar Opportunities
The criteria used to identify Innoviva can be repeated to find other hidden gems in the market. The Affordable Growth screen is a repeatable framework that filters for strong growth (rating above 7), reasonable valuation (rating above 5), and decent health and profitability. If you are interested in exploring more stocks that meet this strict criteria, you can access the full list of Affordable Growth screen results here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial advisor before making investment decisions.
Read full article here »
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Innoviva Inc (NASDAQ:INVA): A GARP Standout with 470% EPS Growth and a P/E of Just 6.05
Innoviva Inc (NASDAQ:INVA) stands out in the current market environment as a potential candidate for investors seeking growth at a reasonable price. The Affordable Growth screen is designed to identify companies that combine solid earnings and revenue expansion with sensible valuation metrics, avoiding the trap of paying excessive premiums for future potential. This approach, often referred to as GARP (Growth at a Reasonable Price), is particularly relevant now when both the long-term and short-term trends for the S&P 500 are positive, as investors look for stocks that can deliver sustainable gains without being overhyped. The methodology filters for stocks with a ChartMill Growth rating above 7, a Valuation rating above 5, and decent Health and Profitability scores, ensuring a balanced profile that doesn't sacrifice financial stability for growth.
Growth: Strong Momentum with Accelerating Trends
Innoviva receives a solid Growth rating of 7 out of 10 from ChartMill, a score that justifies its place in the Affordable Growth screen. Over the past year, earnings per share have surged by 470.30%, a figure that highlights the company's operational leverage and ability to turn revenue into profit. Revenue growth is also strong, coming in at 13.75% annually, while the longer-term EPS growth rate sits at a respectable 8.59% per year. Looking forward, analysts expect this momentum to continue: average annual EPS growth is projected at 21.11%, with revenue growth of 9.93%. Importantly, the data shows that growth is accelerating—both EPS and revenue trends are expected to pick up pace compared to historical performance. This is a key criterion for the Affordable Growth screen, as it suggests the company is not merely riding a temporary wave but is building a stronger business trajectory.
Valuation: Rarely This Cheap for Such Growth
The standout feature of Innoviva is its Valuation rating of 9 out of 10, making it one of the most attractively priced stocks in its industry. The trailing Price/Earnings ratio of 6.05 is dramatically lower than both the industry average of 36.95 and the S&P 500’s 26.41, placing Innoviva in the cheapest 5% of its peer group. The forward P/E of 9.83 still represents a steep discount compared to the broader market’s 20.80. When examining the Enterprise Value to EBITDA ratio, Innoviva is cheaper than 95% of industry peers, and its Price/Free Cash Flow ratio is similarly favorable. This combination of low multiples and strong growth—reflected in a low PEG ratio—is exactly what the Affordable Growth screen targets. It indicates that investors are not paying a premium for the company’s expansion, which can provide a margin of safety in a rising market.
Health and Profitability: A Solid Foundation
While growth and valuation are the primary drivers in this screen, financial health and profitability are essential supporting criteria. Innoviva performs well here with a Health rating of 8 and a Profitability rating of 7. The company holds an Altman-Z score of 3.37, well above the threshold for financial safety, and a debt-to-free-cash-flow ratio of just 1.50—meaning it could theoretically pay off all its debt in under two years using free cash flow. Liquidity is also exceptional: the current and quick ratios stand at 21.13 and 20.07 respectively, far exceeding industry norms. On the profitability front, return on equity is 37.59%, profit margins are an extraordinary 119.88% (reflecting efficient operations and royalty-based revenue), and operating margins sit at 38.14%. These metrics demonstrate that Innoviva is not only growing but doing so from a position of financial strength, reducing the risk that often accompanies high-growth stocks.
A Balanced Pick for GARP Investors
For those looking to combine growth potential with reasonable valuation, Innoviva checks all the right boxes. The stock scores high on growth acceleration, is remarkably cheap relative to its sector and the broader market, and maintains excellent financial health and profitability. The Affordable Growth screen is specifically designed to uncover such setups—stocks that can compound earnings without demanding an inflated price tag. You can review the full fundamental analysis and detailed scores on ChartMill’s dedicated fundamental analysis page for INVA.
Where to Find Similar Opportunities
The criteria used to identify Innoviva can be repeated to find other hidden gems in the market. The Affordable Growth screen is a repeatable framework that filters for strong growth (rating above 7), reasonable valuation (rating above 5), and decent health and profitability. If you are interested in exploring more stocks that meet this strict criteria, you can access the full list of Affordable Growth screen results here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial advisor before making investment decisions.
Read full article here »