Prestige Consumer Healthcare (PBH), a leading provider of over-the-counter health products, is making strides due to persistent consumer demand. With a robust portfolio, including popular brands such as Clear Eyes, Luden’s, Chloraseptic, and Dramamine, the company has managed to stand out in a competitive market. The recent shift in consumer behavior towards preventive health measures has benefitted the company. The stock has jumped up over 14% on news of top-and-bottom-line beats for the most recent quarter, and analysts anticipate the company’s ability to maintain competitive pricing while continuously introducing new products is set to fuel its growth until 2025.
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Investors interested in exposure to healthcare stocks might find this stock an intriguing option.
A Broad Portfolio of Brands
Prestige Consumer Healthcare produces, markets, and sells a wide range of consumer healthcare products. These range from analgesic powders to dry eye relief products and oral rehydration solutions.
The company markets these products under well-known brand names such as BC, Goody’s, and Boudreaux’s Butt Paste. These products are available for purchase through various channels including mass merchandisers, drug stores, food stores, dollar stores, convenience stores, club stores, and e-commerce platforms.
Recent Financial Results & Outlook
Prestige reported a strong Fiscal third quarter, ending December 31, 2024. Revenue was up 4.8% year-over-year at $290.3 million while exceeding expectations by $3.17 million. The boost in sales performance was largely attributed to the continued growth in the International OTC segment, as well as an improvement in Clear Eyes revenues compared to the fiscal second quarter.
Total net income rose to $61.0 million from $53.0 million in the same quarter of the previous fiscal year, while GAAP earnings per share (EPS) of $1.22 beat consensus projections by $0.06.
Due to robust free cash flow, the company could pay off all remaining variable debt and return capital to shareholders by repurchasing roughly 0.6 million shares for a total investment of approximately $40.2 million.
Management has given forward guidance, anticipating approximately 1% organic revenue growth for Fiscal year 2025, falling between $1,128 and $1,132 million. Adjusted diluted E.P.S. is projected to be about $4.50, and free cash flow is anticipated to be $240 million or more.
Growth at a Reasonable Price
The stock has been a steady grower, climbing over 45% in the past three years. It trades at the high end of its 52-week price range of $60.00 – $86.36 and demonstrates ongoing positive price momentum as it trades above the major moving averages. It appears relatively fairly valued, with a P/S ratio of 3.87x, roughly in line with the Health Care sector average of 3.6x.
Analysts following the company have been bullish on the prospects for PBH stock. For example, Canaccord’s Susan Anderson, a five-star analyst, recently reiterated a Buy rating on the shares and raised the price target to $100 (from $93), noting that the company benefits from a diverse portfolio of brands, continues to generate cash with low-to-mid-30’s EBITDA margins, and invests in innovation to drive price and volume growth.
Based on the recent recommendations of 4 analysts, Prestige Consumer Healthcare is rated a strong buy overall. The average price target for PBH stock is $92.33, representing a potential upside of 6.13% from current levels.
Bottom Line on PBH
Prestige has effectively positioned itself in the competitive over-the-counter health products market. Its broad portfolio of easily recognizable brands and consumers’ increased interest in preventive health measures have contributed to the company’s positive performance. Financial results are promising, with strong top-and-bottom-line beats. Investors looking for healthcare sector exposure might find PBH a compelling option due to its robust financial health, diverse brand portfolio, and favorable market trends.
