Many stocks have been testing new highs in 2020, and one of the most notable is Dr. Reddy’s Laboratories Limited (RDY). Currently, RDY is trading at $54.65 and the avg recommendation for the stock is Moderate Sell. while the current analyst price target stands at $42.25.
To add more color to this target, the company’s high over the last year is $53.88 and the low is $33.33. Over the last 52 weeks, RDY is up 1.43% while the S&P 500 is down -0.75%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, RDY reported a profit of $334.48 million. Dr. Reddy’s Laboratories Limited also saw revenues increase to $618.12 million. In addition, RDY has free cash flow of $335.0 million as of 12-2019 The company’s EBITDA came in at $145.37 million which compares well with its peers.
RDY booked profit margins of 9.50%, its Return on Equity (ROE) is 11.00%, and its Return on Assets is 7.20%. All told, it is clear that, RDY needs to be on your watchlist.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. RDY has a short ratio of 5.25 and outstanding shares of 165.76M.
RDY has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.16 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.29. Dr. Reddy’s Laboratories Limited RDY also noted assets of $3.05 billion at the end of the last quarter. Investors should also keep an eye on sector updates as RDY has historically followed its peers on positive news.
All told, Dr. Reddy’s Laboratories Limited RDY has strung together solid data and demonstrated underlying fundamentals. At its current valuation, RDY represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Dr. Reddy’s Laboratories Limited RDY is now commanding a market cap of 9.07B and a float of 121.69M. RDY is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of RDY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in RDY, either long or short, and we have not been compensated for this article.