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Fast growing Jazz Pharmaceuticals (NASDAQ:JAZZ) reported its third stellar earnings report in a row after the bell Tuesday. The company beat estimates both on the top and the bottom and issued upside guidance going forward. The market has reacted negatively on concerns around slipping margins. I think this is an overreaction and growth investors should pay note as very few stocks have this type of growth prospects at such a low valuation.

Key earnings highlights for Jazz:

  • The company reported earnings of $1.09 per share, $0.04 better than the consensus estimates of $1.05.
  • Revenues rose 100.5% Y/Y to $129.5mm versus the $125.57mm consensus.
  • Jazz issued upside guidance for FY12, sees EPS of $4.70-4.85 vs. $4.66 consensus estimate and sees FY12 revs of $605-615m vs. $599.60mm consensus.

"Jazz Pharmaceuticals is a specialty biopharmaceutical company, focuses on the identification, development, and commercialization of pharmaceutical products to meet unmet medical needs." (Business description from Yahoo Finance).

Four addition reasons JAZZ is a great growth play at under $47 a share:

  1. The median price target on the stock by the 8 analysts that cover the stock is $65.50 a share, more than 30% above its current stock price. Credit Suisse has an "outperform" rating and a $65 price target.
  2. Revenues came in at $272mm for FY2011, analysts expect $600mm in sales in FY2012 and over $800mm in FY2013.
  3. Consensus earnings estimates for both FY2012 and FY2013 have risen significantly over the past three months. The company has now easily beat earnings estimates for three quarters in a row. JAZZ sports a minuscule five year projected PEG (.41) as well.
  4. This fast growing biopharma can be had for under 9 times forward earnings, a discount to its five year average (12.7). It also is selling at the bottom of its historical valuation range based on P/E and P/CF.
Source: Revenues Are Exploding At This Fast Growing Biopharma Stock