West Pharmaceutical Services Inc
Exchange: NYSESector: HealthcareIndustry: Medical Instruments & Supplies
West Pharmaceutical Services, Inc. (West) is a manufacturer of components and systems for the packaging and delivery of injectable drugs, as well as delivery system components for the pharmaceutical, healthcare and consumer products industries. Its business operations are organized into two segments: Pharmaceutical Packaging Systems segment (Packaging Systems) and the Pharmaceutical Delivery Systems segment (Delivery Systems). Its products include stoppers and seals for vials, prefillable syringe components and systems, components for intravenous and blood collection systems, safety and administration systems, advanced injection systems, and contract design and manufacturing services. Its customers include the global producers and distributors of pharmaceuticals, biologics, medical devices and personal care products.
Did you know?
Price sits at 63% of its 52-week range.
Current Price
$267.93
+3.07%GoodMoat Value
$166.89
37.7% overvaluedProfile
Valuation (TTM)
Market Cap$19.28B
P/E39.04
EV$16.90B
P/B6.07
Shares Out71.94M
P/Sales6.27
Revenue$3.07B
EV/EBITDA23.89
West Pharmaceutical Services Inc (WST) Stock Analysis
GoodMoat Analysis
West Pharmaceutical Services is a high-quality business with a moderate competitive moat, but it is currently priced at a significant premium to its estimated fair value. The stock's valuation is unfavourable, presenting a high barrier for a value investor. Further investigation is warranted only if one has a strong conviction in sustained, accelerated growth to justify the price.
Read full analysis
West Pharmaceutical Services (WST) is a leading manufacturer of components and systems for injectable drug delivery, including vial stoppers, syringe components, and containment devices. Its competitive moat, assessed using the GoodMoat framework, appears moderate. It likely scores on criteria such as switching costs (its components are mission-critical and require rigorous validation), niche dominance in high-value containment, and technology leadership in proprietary materials. However, with a revenue growth of 7.5% YoY, it may lack the high-growth, network-effect-driven advantages seen in other sectors. The company demonstrates strong quality indicators, including a robust ROE of 15.5%, a healthy operating margin of 19.0%, and a conservative debt/equity ratio of 0.10. Applying the Decision Framework, WST likely passes the initial Moat & Quality Gate. The critical issue is valuation. The stock trades at a P/E of 35.2 and a price of $241.4, which is approximately 45% above the GoodMoat Target of $166.89. This indicates a negative margin of safety, placing it in the 'Unfavourable' valuation band. For a value investor, this represents a classic case of a wonderful company at an expensive price. The low FCF yield of 2.7% further supports the view that the current price embeds optimistic future expectations. Analysis based on data as of 2024-05-15.
Market Cap$19.28B
Current Price$267.93
P/E Ratio39.04
Forward P/E—
PEG Ratio17.47
EPS$6.79
Book Value$44.15
P/B Ratio6.07
WST Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 11.7% FCF growth (CAGR)
Cash vs Debt
Net Cash: 470M
Revenue
1.8B
FY19
2.1B
FY20
2.8B
FY21
2.9B
FY22
2.9B
FY23
2.9B
FY24
3.1B
FY25
Net Income
242M
FY19
346M
FY20
662M
FY21
586M
FY22
593M
FY23
493M
FY24
494M
FY25
WST 52-Week Range
$201.18
$306.72
50-Day MA: $246.28200-Day MA: $254.75
Did you know?
Trading 38% above its estimated fair value of $166.89.
West Pharmaceutical Services Inc (WST) Financial Summary
West Pharmaceutical Services Inc (WST) is a Healthcare company in the Medical Instruments & Supplies industry, listed on NYSE. The stock currently trades at $267.93 with a market capitalization of $19.28B.
Key valuation metrics include a P/E ratio of 39.04, price-to-book ratio of 6.07, and EPS of $6.79. The company reports a profit margin of 16.1% and return on equity of 15.5%.
WST Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $19.28B |
| P/E Ratio | 39.04 |
| EPS | $6.79 |
| P/B Ratio | 6.07 |
| P/S Ratio | 6.27 |
| EV/EBITDA | 23.89 |
| Dividend Yield | 0.32% |
| Profit Margin | 16.1% |
| Return on Equity | 15.5% |
| Debt/Equity | 0.10 |
WST Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $1.84B | $241.70M |
| FY20 | $2.15B | $346.20M |
| FY21 | $2.83B | $661.80M |
| FY22 | $2.89B | $585.90M |
| FY23 | $2.95B | $593.40M |
| FY24 | $2.89B | $492.70M |
| FY25 | $3.07B | $493.70M |
West Pharmaceutical Services Inc (WST) Valuation
Based on GoodMoat's DCF model, West Pharmaceutical Services Inc has a fair value estimate of $166.89. At the current price of $267.93, the stock appears 60.5% overvalued relative to our intrinsic value estimate.
WST Quality Indicators
West Pharmaceutical Services Inc maintains a profit margin of 16.1% and an operating margin of 19.0%. Return on equity stands at 15.5%. The current ratio is 3.02. Debt-to-equity ratio is 0.10.
About West Pharmaceutical Services Inc
West Pharmaceutical Services, Inc. (West) is a manufacturer of components and systems for the packaging and delivery of injectable drugs, as well as delivery system components for the pharmaceutical, healthcare and consumer products industries. Its business operations are organized into two segments: Pharmaceutical Packaging Systems segment (Packaging Systems) and the Pharmaceutical Delivery Systems segment (Delivery Systems). Its products include stoppers and seals for vials, prefillable syringe components and systems, components for intravenous and blood collection systems, safety and administration systems, advanced injection systems, and contract design and manufacturing services. Its customers include the global producers and distributors of pharmaceuticals, biologics, medical devices and personal care products.
WST Free Cash Flow
West Pharmaceutical Services Inc generated $468.90M in trailing twelve-month free cash flow, representing an FCF yield of 2.43%. This moderate FCF yield indicates reasonable cash generation.
WST Shares Outstanding
West Pharmaceutical Services Inc has 0.07 billion shares outstanding at a share price of $267.93, giving it a market capitalization of $19.28B.