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Why Is Phibro (PAHC) Down 1.1% Since Last Earnings Report?

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It has been about a month since the last earnings report for Phibro Animal Health (PAHC - Free Report) . Shares have lost about 1.1% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Phibro due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Phibro Animal Health Corporation before we dive into how investors and analysts have reacted as of late.

Phibro Q4 Earnings Top Estimates, Gross Margin Dips

Phibro Animal Health delivered adjusted earnings per share of 57 cents in the fourth quarter of fiscal 2025 compared with 41 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 9.62%.

Without adjustments, GAAP earnings per share in the quarter was 42 cents compared with 2 cents in the prior-year period.

PAHC reported full-year adjusted earnings per share of $2.09, which rose 75.6% from the fiscal 2024 figure. The figure outpaced the Zacks Consensus Estimate by 2.45%.

Revenue Details

Net sales in the quarter totaled $378.7 million, up 38.6% from the year-ago quarter’s level. The figure topped the Zacks Consensus Estimate by 4.86%.

For fiscal 2025, the company reported net sales of $1.30 billion, up 27.4% from the prior-year level. The figure beat the Zacks Consensus Estimate by 1.56%.

Q4 Segmental Sales

The company conducts its operations via three segments — Animal Health, Mineral Nutrition and Performance Products.

In the fourth quarter of fiscal 2025, Animal Health’s net sales increased 53% to $292.5 million. Our model’s projection was $264.4 million.

Within the segment, net sales of medicated feed additives (MFAs) and others reflected 77% year-over-year growth, driven by incremental revenues of $94.5 million from the Zoetis MFA portfolio and increased demand for the MFAs in international regions.

Nutritional specialty product sales rose 11% due to higher sales of microbial and companion animal products.

Net vaccine sales showed a year-over-year rise of 21% due to continued growth of poultry products in Latin America and higher international demand.

Net sales in the Mineral Nutrition segment rose 3% year over year to $64.2 million, mainly due to an increase in demand for copper and trace minerals. However, the figure lagged our model’s forecast of $74.3 million.

Net sales in the Performance Products segment rose 13% to $22.1 million due to higher demand for the ingredients used in personal care products. Our model projected $20.6 million from this segment.

Q4 Margin Performance

Phibro’s fiscal fourth-quarter gross profit rose 26.2% year over year to $110 million. However, the gross margin contracted 287 basis points (bps) to 29.1% due to a 44.5% rise in the cost of goods sold.

Selling, general and administrative expenses in the reported quarter were $76.3 million, up 11.1% from the year-ago quarter’s levels. The operating profit totaled $33.7 million, an increase of 82.2% year over year. The operating margin expanded 213 bps year over year to 8.9%.    

Financial Update

The company exited the fourth quarter of fiscal 2025 with cash and short-term investments of $77 million compared with $114.6 million at the end of fiscal 2024.

Cumulative net cash provided by operating activities at the end of fiscal 2025 was $80.1 million compared with $87.6 million in the year-ago period.

Fiscal 2026 Guidance

For fiscal 2026, the company expects net sales in the range of $1.43-$1.48 billion, implying 12% growth. The Zacks Consensus Estimate for the metric is pegged at $1.41 billion.

Adjusted earnings per share is expected in the band of $2.52-$2.70, which indicates a 25% increase. The Zacks Consensus Estimate stands at $2.30.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 21.33% due to these changes.

VGM Scores

Currently, Phibro has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Phibro has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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