INCYIncyte
Is the business good?
A genuinely good business: 7 of 9 health tests passed, earnings fully cash-backed (1.2×), and margins widening.
High fundamental quality. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 24% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is INCY?
Incyte earns 59% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 50 points above what the capital costs: growth creates value
- Operating margin
- 30%
Operating margin · Biotechnology median −77% · 12 months to Q1 2026
- Cash conversion
- 1.17×
Cash conversion · 2.77× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +4.4%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | −9.9% |
| FY2021 | 20% |
| FY2022 | 17% |
| FY2023 | 17% |
| FY2024 | 1.5% |
| FY2025 | 29% |
Details›
- Gross margin12 months to Q1 2026
- 92%
- Operating margin12 months to Q1 2026
- 30%
- Net margin12 months to Q1 2026
- 27%
- R&D as % of revenue
- 40%
- Revenue, trailing twelve months
- $5.36B
- Net income, trailing twelve months
- $1.43B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 59%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Biotechnology
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