What a brutal six months it’s been for United Therapeutics. The stock has dropped 23.1% and now trades at $308, rattling many shareholders. This might have investors contemplating their next move.

Given the weaker price action, is now the time to buy UTHR? Find out in our full research report, it’s free.

Why Are We Positive On United Therapeutics?

Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ:UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.

1. Long-Term Revenue Growth Shows Strong Momentum

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, United Therapeutics’s 15.7% annualized revenue growth over the last five years was solid. Its growth surpassed the average healthcare company and shows its offerings resonate with customers.United Therapeutics Quarterly Revenue

2. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

United Therapeutics has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the healthcare sector, averaging an eye-popping 36% over the last five years.United Therapeutics Trailing 12-Month Free Cash Flow Margin

3. New Investments Bear Fruit as ROIC Jumps

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Fortunately, United Therapeutics’s ROIC has increased significantly over the last few years. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.United Therapeutics Trailing 12-Month Return On Invested Capital

Final Judgment

These are just a few reasons United Therapeutics is a rock-solid business worth owning. With the recent decline, the stock trades at 10.5× forward P/E (or $308 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.

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