Prestige Consumer Healthcare’s (PBH Quick QuotePBH - Free Report) dedication to brand building drives consistent market share growth. The company has grown its portfolio through internal developments and strategic acquisitions. Investments in online content and digital advertising fuel the company’s e-commerce success. Meanwhile, cost pressures from macroeconomic headwinds and solvency issues weigh on Prestige Consumer’s operations.

In the past year, this Zacks Rank #2 (Buy) stock has rallied 27.2% compared with the industry and the S&P 500 composite’s growth of 11.4% and 27.4%, respectively.

The renowned consumer healthcare product company has a market capitalization of $3.38 billion. PBH’s earnings surpassed estimates in three of the trailing four quarters and came in line once, delivering an average surprise of 2.4%.

Let’s delve deeper.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Upsides for PBH

Acquisitions Aid Growth: Over the years, the company has expanded its brand portfolio organically and through acquisitions. It acquired TheraTears and four other over-the-counter consumer brands across the VMS and Cough & Cold categories from the 2021 acquisition of Akorn Operating Company LLC. The company acquired Hydralyte (an over-the-counter oral rehydration brand in Australia) from the Hydration Pharmaceuticals Trust of Victoria, Australia.

Having a strong and diverse portfolio of products has provided Prestige Consumer with multiple sources of growth and minimized the impact of any individual category slowdowns.  Moreover, this diversity stretches beyond just brands to the diversity of channels, geographies and suppliers, each of which benefits the company’s business in periods of uncertainty and volatility.

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Focus on Brand-Building: Prestige Consumer emphasizes brand building and product innovation in niche consumer healthcare categories, which, combined with efficient marketing, channel development and innovative approaches, have led these to maintain market leadership. One such example is the Goody’s, a brand the company acquired more than 10 years ago. With the iconic Dramamine, the company began addressing the distinctive nausea market with new nausea offerings, where it now remains a leader in the category.

The Nix brand has also gradually expanded its product assortment with consumers over time, supported by effective marketing to capitalize on category incident levels. Further, Prestige Consumer is making progress in its women's health franchise, which is represented by two distinct number-one market share brands — Monistat and Summers Eve. In the first quarter of fiscal 2025, the company’s strong international growth was broad-based, driven by the Hydrolyte brand (an oral hydration products brand famous in Australia).

E-Commerce Strength: Over the last several years, Prestige has developed long-term partnerships across its diverse retail footprint and invested early and heavily in the e-commerce channel. These multi-year investments have been delivering impressive results, continuing the long-term trend of higher online purchasing. Simultaneously, the company has been maintaining a consistent profit profile across all its distribution channels. These impressive wins with consumers across e-commerce through investments in online content and digital advertising have positioned the company for further growth.

Concerns for PBH

Debt Profile: At the end of the fiscal second quarter, Prestige Consumer had a long-term debt of $1.05 billion, while cash and cash equivalents were $52 million. Although the company does not have any near-term debt payable, the debt to capital ratio stood moderately leveraged at 37.8%, while times interest earned was just at 5.7.

Cost Woes: Economic conditions in the United States and globally have been and will continue to be volatile due to several factors, such as supply-chain constraints, rising interest rates, a high inflationary environment and geopolitical events. As a result, these uncertainties could put pressure on prices and supply and potentially affect the demand for Prestige Consumer’s products. 

PBH Stock Estimate Trend

In the past 30 days, the Zacks Consensus Estimate for PBH’s fiscal 2025 earnings per share has remained constant at $4.44.  

The Zacks Consensus Estimate for the company’s fiscal 2025 revenues is pegged at $1.13 billion. This suggests an increase of 0.7% from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Haemonetics (HAE Quick QuoteHAE - Free Report) , Boston Scientific (BSX Quick QuoteBSX - Free Report) and Phibro Animal Health (PAHC Quick QuotePAHC - Free Report) .

Haemonetics has an earnings yield of 5.59% compared with the industry’s 1.35%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 2.82%. Its shares have fallen 10.7% against the industry’s 11.6% growth in the past year.

HAE carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 62.6% compared with the industry’s 11.6% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.29%.

Phibro Animal Health, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 36.1% for fiscal 2025 compared with the industry’s 11.6%. Shares of the company have surged 87.4% compared with the industry’s 11.6% growth over the past year. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 25.47%.