It is getting significantly harder to find growth stocks at a reasonable price after the rally of the last few months. One growth stock that I still like here and think has substantial upside is Jazz Pharmaceuticals (NASDAQ:JAZZ). The stock is still cheap given its substantial growth prospects and analysts have made several positive comments recently.
Recent positives for JAZZ:
- Cantor Fitzgerald just initiated the shares as a "Buy" and put a $86 a share price target on the stock, more than 40% above its current price.
- WallachBeth also raised its price target to $70 from $63 a share for Jazz Pharmaceuticals following the company's better than expected Q4 results recently. It also reiterates a Buy rating on the stock.
- Consensus earnings estimates for both FY2013 and FY2014 have risen nicely over the last month.
Jazz Pharmaceuticals Public Limited Company is a specialty biopharmaceutical company. It has several specialty products in production including Xyrem for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy; Erwinaze to treat acute lymphoblastic leukemia and Prialt for the management of severe chronic pain.
4 reasons JAZZ has upside from under $60 a share:
- Earnings are climbing rapidly. The company made $2.67 a share in FY2011 and $4.82 in FY2012. Analysts project over $5.75 in EPS in FY2013 and over $7 in FY2014.
- Earnings are being powered by large revenue growth. The consensus projection is the company will increase sales better than 40% in FY2013 and over 15% in FY2014.
- The company has more than quadrupled operating cash flow in the last three years and also benefits from lower tax rates than competitors due to being based in Ireland.
- The stock is selling in the bottom third of its five year valuation range based on P/E, P//S and P/B. JAZZ also has a minuscule five year projected PEG (.37).