AMNEAL PHARMACEUTICALS, INC. (AMRX) Hit a 52 Week High, Can the Run Continue?

Amneal Pharmaceuticals (AMRX) reported $702.47 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 13.3%. EPS of $0.16 for the same period compares to $0.19 a year ago.

The reported revenue represents a surprise of +1.27% over the Zacks Consensus Estimate of $693.68 million. With the consensus EPS estimate being $0.13, the EPS surprise was +23.08%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Amneal performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Net Revenue- Generics Segment: $427.35 million versus $404.71 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +9.3% change.
• Net Revenue- AvKARE Segment: $159.49 million versus the three-analyst average estimate of $167.09 million. The reported number represents a year-over-year change of +20.9%.
• Net Revenue- Specialty Segment: $115.64 million versus $120.20 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +18.8% change.

View all Key Company Metrics for Amneal here>>>

Shares of Amneal have returned +1.8% over the past month versus the Zacks S&P 500 composite's +4.9% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

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On Friday, Amneal Pharmaceuticals Inc reported third-quarter adjusted EPS of $0.16, down from $0.19 a year ago, beating the consensus of $0.14.

The company reported sales of $702.47 million, up 13% year-over-year, beating the consensus of $696.80 million.

Generic net revenue increased by 9% to $427.35 million, driven by the strong performance of new product launches and biosimilars.

Specialty net revenue increased 19% to $115.64 million, driven by promoted products in neurology and endocrinology, including the recent launches of CREXONT and ONGENTYS for Parkinson’s disease.

AvKARE’s net revenue increased by 21% to $159.49 million, driven by growth across its distribution and government-label sales channels.

Adjusted EBITDA in the third quarter of 2024 was $158 million, an increase of 2% compared to the third quarter of 2023, reflective of strong revenue performance and higher gross margins, partially offset by a $20 million research and development milestone payment associated with the company’s exclusive license of Omalizumab during the third quarter of 2024.

“Q3 was an excellent quarter where we continued to drive strong financial results across our diversified business and we announced three strategic actions to solidify our long-term growth:

• We launched CREXONT for the treatment of Parkinson’s disease.
• We announced our collaboration with Metsera, Inc. to leverage Amneal’s expertise and supply next-generation medicines for obesity and metabolic diseases.
• We expanded our deep pipeline by in-licensing a new high-value biosimilar,” said Chirag and Chintu Patel, Co-CEOs.

Guidance: Amneal has reaffirmed its 2024 revenue guidance of $2.7 billion—$2.8 billion and adjusted EPS of $0.57-$0.63, versus the consensus of $2.76 billion and $0.60, respectively.

The company expects 2024 adjusted EBITDA of $610 million—$630 million, operating cash flow of $280 million—$320 million and capital expenditures of $60 million—$70 million.

Price Action: At last check on Friday, AMRX stock down up 4.88% to $8.19 during the premarket session.

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Amneal Pharmaceuticals (AMRX) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 23.08%. A quarter ago, it was expected that this pharmaceutical company would post earnings of $0.14 per share when it actually produced earnings of $0.16, delivering a surprise of 14.29%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Amneal, which belongs to the Zacks Medical - Drugs industry, posted revenues of $702.47 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.27%. This compares to year-ago revenues of $620.04 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Amneal shares have added about 41.9% since the beginning of the year versus the S&P 500's gain of 25.2%.

What's Next for Amneal?

While Amneal has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Amneal: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.16 on $700.15 million in revenues for the coming quarter and $0.59 on $2.75 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Drugs is currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, ProPhase Labs, Inc. (PRPH), has yet to report results for the quarter ended September 2024.

This company is expected to post quarterly loss of $0.31 per share in its upcoming report, which represents a year-over-year change of -3.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

ProPhase Labs, Inc.'s revenues are expected to be $2.82 million, down 66.3% from the year-ago quarter.

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