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Phibro (PAHC) Up 17.1% Since Q2 Earnings: What's Driving It?
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Shares of Phibro Animal Health Corporation (PAHC - Free Report) have rallied 17.1% against the the industry's decline of 2.7% since its second-quarter fiscal 2022 earnings release on Feb 9.
The global diversified animal health and mineral nutrition company has a market capitalization of $885 million. Its earnings for second-quarter fiscal 2022 surpassed the Zacks Consensus Estimate by 12.1%.
This Zacks Rank #2 (Buy) stock has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
The rally was largely driven by continued demand for the company’s products globally. Further, the market is upbeat about the company’s raised revenue and earnings per share (EPS) guidance for fiscal 2022 on improving business trends.
Let’s take a quick look at the important catalysts to understand this positive trend.
Key Growth Drivers
Impressive Q2 Performance: The market is upbeat about Phibro’s second-quarter fiscal 2022 performance with better-than-expected earnings. The year-over-year increase in the top line was primarily driven by continued demand for the company’s products globally. Robust performance by the Animal Health and Mineral Health segments buoys optimism. Further, the company has raised its revenue and EPS guidance for fiscal 2022 on improving business trends. Animal Health's net sales increased 10.8% during the fiscal second quarter, driven by higher demand in North America and South America, indicating ongoing recovery from pandemic-led impact. Apart from this, net vaccine sales rose 19.7% year over year on increased domestic and international volumes.
Recent Dyadic Deal Looks Promising: The market is also upbeat about Phibro’s recent Dyadic Deal, which is likely to fortify the animal vaccine wing. Phibro has entered into an exclusive license agreement with global biotechnology company Dyadic International to develop and commercialize an animal health vaccine. Per the terms of the deal, Phirbo will get an exclusive license to use the Dyadic proprietary C1-cell protein production platform to produce specific targeted antigens for the development and commercialization of a poultry vaccine for a Phibro targeted disease.
Image Source: Zacks Investment Research
Bullish Guidance: Phibro has raised its fiscal 2022 financial guidance, which instills investor confidence in the stock.
The company projects net sales for fiscal 2022 in the range of $890.0-$920.0 million, an improvement from the earlier-provided band of $860.0-$890.0 million. The Zacks Consensus Estimate for the metric is pegged at $875.05 million.
Adjusted EPS was reiterated in the band of $1.30-$1.39, up from the earlier-provided band of $1.25-$1.32. The Zacks Consensus Estimate for the same is pinned at $1.28.
Favorable Growth Parameters
For 2022, Phibro has an expected earnings growth rate of 8.66%, while revenues are expected to grow 9.64% on a year-over-year basis.
Phibro has a current cash flow growth rate of 7.95% compared with the industry’s growth rate of 2.89%. The stock’s return on equity (ROE) stands at an impressive 22.4% versus the industry’s (10.6%).
Phibro raised its dividend once in the past five years, with its payout growing 5.1% over the period. PAHC’s payout ratio is currently at 38% of earnings.
Other Key Picks
A few other top-ranked stocks in the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 28.2% versus the 58.4% industry decline.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently carries a Zacks Rank #2.
Henry Schein has gained 30.4% compared with the industry’s 7.8% rise over the past year.
West Pharmaceutical has a long-term earnings growth rate of 27.6%. West Pharmaceutical surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 29.4%.
West Pharmaceutical has outperformed its industry over the past year. WST currently carries a Zacks Rank of 2.
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Phibro (PAHC) Up 17.1% Since Q2 Earnings: What's Driving It?
Shares of Phibro Animal Health Corporation (PAHC - Free Report) have rallied 17.1% against the the industry's decline of 2.7% since its second-quarter fiscal 2022 earnings release on Feb 9.
The global diversified animal health and mineral nutrition company has a market capitalization of $885 million. Its earnings for second-quarter fiscal 2022 surpassed the Zacks Consensus Estimate by 12.1%.
This Zacks Rank #2 (Buy) stock has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
The rally was largely driven by continued demand for the company’s products globally. Further, the market is upbeat about the company’s raised revenue and earnings per share (EPS) guidance for fiscal 2022 on improving business trends.
Let’s take a quick look at the important catalysts to understand this positive trend.
Key Growth Drivers
Impressive Q2 Performance: The market is upbeat about Phibro’s second-quarter fiscal 2022 performance with better-than-expected earnings. The year-over-year increase in the top line was primarily driven by continued demand for the company’s products globally. Robust performance by the Animal Health and Mineral Health segments buoys optimism. Further, the company has raised its revenue and EPS guidance for fiscal 2022 on improving business trends. Animal Health's net sales increased 10.8% during the fiscal second quarter, driven by higher demand in North America and South America, indicating ongoing recovery from pandemic-led impact. Apart from this, net vaccine sales rose 19.7% year over year on increased domestic and international volumes.
Recent Dyadic Deal Looks Promising: The market is also upbeat about Phibro’s recent Dyadic Deal, which is likely to fortify the animal vaccine wing. Phibro has entered into an exclusive license agreement with global biotechnology company Dyadic International to develop and commercialize an animal health vaccine. Per the terms of the deal, Phirbo will get an exclusive license to use the Dyadic proprietary C1-cell protein production platform to produce specific targeted antigens for the development and commercialization of a poultry vaccine for a Phibro targeted disease.
Bullish Guidance: Phibro has raised its fiscal 2022 financial guidance, which instills investor confidence in the stock.
The company projects net sales for fiscal 2022 in the range of $890.0-$920.0 million, an improvement from the earlier-provided band of $860.0-$890.0 million. The Zacks Consensus Estimate for the metric is pegged at $875.05 million.
Adjusted EPS was reiterated in the band of $1.30-$1.39, up from the earlier-provided band of $1.25-$1.32. The Zacks Consensus Estimate for the same is pinned at $1.28.
Favorable Growth Parameters
For 2022, Phibro has an expected earnings growth rate of 8.66%, while revenues are expected to grow 9.64% on a year-over-year basis.
Phibro has a current cash flow growth rate of 7.95% compared with the industry’s growth rate of 2.89%. The stock’s return on equity (ROE) stands at an impressive 22.4% versus the industry’s (10.6%).
Phibro raised its dividend once in the past five years, with its payout growing 5.1% over the period. PAHC’s payout ratio is currently at 38% of earnings.
Other Key Picks
A few other top-ranked stocks in the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 28.2% versus the 58.4% industry decline.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently carries a Zacks Rank #2.
Henry Schein has gained 30.4% compared with the industry’s 7.8% rise over the past year.
West Pharmaceutical has a long-term earnings growth rate of 27.6%. West Pharmaceutical surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 29.4%.
West Pharmaceutical has outperformed its industry over the past year. WST currently carries a Zacks Rank of 2.