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AMNEAL PHARMACEUTICALS, INC. (AMRX) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Amneal Pharmaceuticals (AMRX - Free Report) ? Shares have been on the move with the stock up 7.2% over the past month. The stock hit a new 52-week high of $7.81 in the previous session. Amneal Pharmaceuticals has gained 28% since the start of the year compared to the 6.6% move for the Zacks Medical sector and the -2.9% return for the Zacks Medical - Drugs industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 9, 2024, Amneal reported EPS of $0.16 versus consensus estimate of $0.14 while it beat the consensus revenue estimate by 6.75%.
For the current fiscal year, Amneal is expected to post earnings of $0.59 per share on $2.64 billion in revenues. This represents a -7.81% change in EPS on a 10.44% change in revenues. For the next fiscal year, the company is expected to earn $0.60 per share on $2.76 billion in revenues. This represents a year-over-year change of 1.13% and 4.46%, respectively.
Valuation Metrics
Amneal may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Amneal has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.5X. On a trailing cash flow basis, the stock currently trades at 5.8X versus its peer group's average of 8.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Amneal currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Amneal fits the bill. Thus, it seems as though Amneal shares could still be poised for more gains ahead.
How Does AMRX Stack Up to the Competition?
Shares of AMRX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Jazz Pharmaceuticals PLC (JAZZ - Free Report) . JAZZ has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Jazz Pharmaceuticals PLC beat our consensus estimate by 13.25%, and for the current fiscal year, JAZZ is expected to post earnings of $19.36 per share on revenue of $4.04 billion.
Shares of Jazz Pharmaceuticals PLC have gained 6.5% over the past month, and currently trade at a forward P/E of 5.84X and a P/CF of 4.06X.
The Medical - Drugs industry is in the top 39% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMRX and JAZZ, even beyond their own solid fundamental situation.
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AMNEAL PHARMACEUTICALS, INC. (AMRX) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Amneal Pharmaceuticals (AMRX - Free Report) ? Shares have been on the move with the stock up 7.2% over the past month. The stock hit a new 52-week high of $7.81 in the previous session. Amneal Pharmaceuticals has gained 28% since the start of the year compared to the 6.6% move for the Zacks Medical sector and the -2.9% return for the Zacks Medical - Drugs industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 9, 2024, Amneal reported EPS of $0.16 versus consensus estimate of $0.14 while it beat the consensus revenue estimate by 6.75%.
For the current fiscal year, Amneal is expected to post earnings of $0.59 per share on $2.64 billion in revenues. This represents a -7.81% change in EPS on a 10.44% change in revenues. For the next fiscal year, the company is expected to earn $0.60 per share on $2.76 billion in revenues. This represents a year-over-year change of 1.13% and 4.46%, respectively.
Valuation Metrics
Amneal may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Amneal has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.5X. On a trailing cash flow basis, the stock currently trades at 5.8X versus its peer group's average of 8.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Amneal currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Amneal fits the bill. Thus, it seems as though Amneal shares could still be poised for more gains ahead.
How Does AMRX Stack Up to the Competition?
Shares of AMRX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Jazz Pharmaceuticals PLC (JAZZ - Free Report) . JAZZ has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Jazz Pharmaceuticals PLC beat our consensus estimate by 13.25%, and for the current fiscal year, JAZZ is expected to post earnings of $19.36 per share on revenue of $4.04 billion.
Shares of Jazz Pharmaceuticals PLC have gained 6.5% over the past month, and currently trade at a forward P/E of 5.84X and a P/CF of 4.06X.
The Medical - Drugs industry is in the top 39% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMRX and JAZZ, even beyond their own solid fundamental situation.