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Is it Time to Buy Impax Laboratories? (NASDAQ:IPXL)
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We look at Impax Laboratories Inc. (NASDAQ:IPXL) a company in the Healthcare industry getting a lot of share market attention at present, to assess if it provides value for investors considering buying or selling it. Currently Impax Laboratories Inc. is trading at $46.21 after moving up 1.65% in the previous day of trading. [Trend Analysis]
IPXL is trading with a trailing 12 month P/E multiple of 73.35 and an estimated forward P/E multiple of 20.56. The stock has an estimated 5 year annual growth of 21.96% and a PEG multiple of 3.34.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Impax Laboratories Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of IPXL. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of IPXL being 3.34, we consider Impax Laboratories Inc. to likely be overpriced.
This analysis means that value buyers who do not currently hold Impax Laboratories Inc. (NASDAQ:IPXL) should not consider buying and investors currently holding the stock should consider selling.
The mean analyst 12 month target price for Impax Laboratories Inc. (NASDAQ:IPXL) is currently $44.68 or 3.31% below the current price. Additionally, the stock has been as high as $52.10 and as low as $22.12 in the last 52 weeks. Analysts are estimating that IPXL will report earnings per share of $0.46 next quarter.
