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Balchem (BCPC)
:BCPC
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Balchem
(NASDAQ:BCPC)
74Outperform
Positive Factors
Growth Prospects
Analyst expects continued growth in the Human Nutrition and Health (HNH) segment to bolster revenue and drive sequential gains in the coming quarters.
Product Development
Balchem recently unveiled two new solutions, K2Vital Delta Fermented and VitaCholine Pro-Flo, which are expected to drive uptake and market demand.
Strategic Partnerships
The partnership with FC Bayern Women marks a key milestone in Balchem’s longer-term strategy to bridge the gap between B2B and B2C markets.
Negative Factors
Division Revenue
The HNH division generated 4Q24 revenue well below the estimate.
Earnings
Balchem's 4Q24 GAAP net earnings came in somewhat below the forecasted amount, indicating a moderate earnings miss.
Financial Performance
Balchem's 4Q24 and full-year 2024 financial results displayed revenue moderately below estimates.
Balchem (BCPC) vs. S&P 500 (SPY)
Market Cap
$5.21B
Dividend Yield0.54%
Average Volume (3M)187.35K
Price to Earnings (P/E)40.8
Beta (1Y)0.85
Revenue Growth3.39%
EPS Growth17.52%
CountryUS
Employees1,361
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)3.93
Shares Outstanding32,532,722
10 Day Avg. Volume237,339
30 Day Avg. Volume187,346
Financial Highlights & Ratios
PEG Ratio2.33
Price to Book (P/B)N/A
Price to Sales (P/S)5.50
Price to Cash Flow (P/CF)25.10
P/FCF Ratio23.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$203.00Price Target Upside30.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Balchem Business Overview & Revenue Model
Company DescriptionBalchem Corporation (BCPC) is a publicly traded company specializing in niche markets within the health and nutrition sectors. The company operates through three primary segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. Balchem's offerings include microencapsulation, chelated mineral solutions, and specialty ingredients, serving industries ranging from food and beverage to pharmaceuticals and animal feed.
How the Company Makes MoneyBalchem Corporation generates revenue through the sale of its specialized products and solutions across its three main segments. In the Human Nutrition & Health segment, the company sells ingredients used in dietary supplements, food, and beverage products, focusing on enhancing health and wellness. The Animal Nutrition & Health segment offers nutritional products and supplements for livestock and poultry, aiming to improve animal health and productivity. In the Specialty Products segment, Balchem provides products like ethylene oxide for medical device sterilization and choline-based compounds for industrial applications. The company's earnings are bolstered by strategic partnerships with major industry players and ongoing innovation to meet evolving market demands.
Balchem Financial Statement Overview
Summary
Balchem Corporation displays a strong financial position with consistent revenue and profit growth, robust operational efficiency, and a solid balance sheet with low leverage. The company generates strong cash flows, enabling continued investment in growth opportunities. While the investing and financing activities require careful management to maintain liquidity, overall financial health is excellent, positioning the company well in the competitive chemicals industry.Income Statement
Balchem shows robust growth in revenue with a consistent increase from $643.7M in 2019 to $953.7M in 2024. The gross profit margin has improved to 35.2%, indicating efficient cost management. The net profit margin improved to 13.5%, reflecting strong profitability. EBIT and EBITDA margins are both strong at 19.2%, showing operational efficiency. The revenue growth rate is positive, indicating a healthy upward trend.85
Very Positive
Balance Sheet
The company maintains a solid equity base with an equity ratio of 73.0%. The debt-to-equity ratio has improved significantly to 0.03, reducing leverage risk. ROE stands at 11.2%, showcasing decent returns on equity. Overall, the balance sheet reflects stability and low financial risk, with a strong equity position supporting future growth.82
Very Positive
Cash Flow
Balchem has a strong operating cash flow of $182M, with steady free cash flow growth. The free cash flow to net income ratio is solid, indicating efficient cash conversion. The operating cash flow to net income ratio of 1.42 suggests robust cash generation supporting profitability. However, investing and financing cash flow trends show significant outflows, which could impact liquidity if not managed carefully.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 953.68M | 922.44M | 942.36M | 799.02M | 703.64M | Gross Profit |
| 336.21M | 302.06M | 280.45M | 243.17M | 223.90M | EBIT |
| 182.91M | 159.19M | 145.19M | 127.50M | 111.15M | EBITDA |
| 182.91M | 214.81M | 197.57M | 175.70M | 162.13M | Net Income Common Stockholders |
| 128.47M | 108.54M | 105.37M | 96.10M | 84.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 49.52M | 64.45M | 66.56M | 103.24M | 84.57M | Total Assets |
| 1.58B | 1.60B | 1.62B | 1.20B | 1.17B | Total Debt |
| 37.38M | 330.33M | 440.57M | 108.57M | 163.57M | Net Debt |
| -12.14M | 265.89M | 374.01M | 5.33M | 79.00M | Total Liabilities |
| 425.46M | 543.23M | 686.23M | 322.31M | 337.61M | Stockholders Equity |
| 1.15B | 1.05B | 938.28M | 877.01M | 828.23M |
| Cash Flow | Free Cash Flow | |||
| 182.00M | 145.87M | 88.25M | 123.06M | 116.67M | Operating Cash Flow |
| 182.00M | 183.76M | 138.54M | 160.51M | 150.49M | Investing Cash Flow |
| -59.74M | -34.81M | -416.01M | -35.30M | -34.59M | Financing Cash Flow |
| -133.81M | -153.32M | 246.68M | -102.18M | -101.16M |
Balchem Technical Analysis
Negative
155.78
Price Trends
165.34
Negative
167.68
Negative
167.96
Negative
Market Momentum
-0.50
Positive
51.93
Neutral
76.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BCPC, the sentiment is Negative. The current price of 155.78 is below the 20-day moving average (MA) of 165.25, below the 50-day MA of 165.34, and below the 200-day MA of 167.96, indicating a bearish trend. The MACD of -0.50 indicates Positive momentum. The RSI at 51.93 is Neutral, neither overbought nor oversold. The STOCH value of 76.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BCPC.
Balchem Risk Analysis
Balchem disclosed 26 risk factors in its most recent earnings report. Balchem reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Balchem Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $70.98B | 33.95 | 25.14% | 0.97% | 2.75% | 54.39% | |
74 Outperform | $5.21B | 40.80 | 11.66% | 0.54% | 3.39% | 17.52% | |
68 Neutral | $2.97B | 17.64 | 7.32% | 3.25% | 3.11% | 123.46% | |
63 Neutral | $4.86B | 14.36 | 9.02% | 5.96% | -5.36% | -74.25% | |
57 Neutral | $2.50B | 21.03 | 0.18% | 3.05% | -4.35% | -115.63% | |
54 Neutral | $19.55B | 80.54 | 1.71% | 2.09% | 0.04% | ― | |
47 Neutral | $2.64B | -3.21 | -21.68% | 3.30% | 4.19% | -30.23% |
* Basic Materials Sector Average
Performance Comparison
BCPC
Balchem
155.78
6.32
4.23%
ASH
Ashland
49.18
-43.72
-47.06%
ECL
Ecolab
237.77
12.24
5.43%
FMC
FMC
35.44
-20.72
-36.89%
IFF
International Flavors & Fragrances
73.12
-8.75
-10.69%
AVNT
Avient
30.43
-11.14
-26.80%
Balchem Earnings Call Summary
Earnings Call Date: Feb 21, 2025 | % Change Since: -3.45% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Positive
The earnings call highlights Balchem's strong financial results for the year and the fourth quarter, with record sales and earnings, significant growth in key segments, and a continued commitment to dividend growth. However, there were challenges in specific markets and increased operating expenses that slightly dampened the overall positive sentiment.Highlights
Record Full Year Sales and Earnings
Balchem achieved record full year sales of $954 million, growing 3.4% compared to the prior year, with record earnings from operations of $183 million, an increase of 14.9%, and record adjusted EBITDA of $250 million, an increase of 8.4% from the prior year.
Strong Fourth Quarter Performance
Fourth quarter consolidated revenues were $240 million, 4.9% higher than the prior year. GAAP earnings from operations for the fourth quarter increased by 23.8% versus the prior year, and adjusted EBITDA rose to $63 million, an increase of 13.4%.
Human Nutrition & Health Segment Growth
The Human Nutrition & Health segment generated sales of $147 million, an increase of 6.8% from the prior year, with earnings from operations increasing by 33.9%.
Improvement in Animal Nutrition & Health Segment
The Animal Nutrition & Health segment generated quarterly sales of $58 million, an increase of 0.3% compared to the prior year, recovering from challenging market conditions earlier in the year.
Dividend Increase
Balchem announced another increase to its annual dividend, taking it from $0.79 to $0.87 per share, a 10% increase year-over-year, marking the 16th consecutive year of double-digit growth.
Lowlights
Challenges in Monogastric Species Markets
The Animal Nutrition & Health segment faced lower sales in the monogastric species markets, partially offsetting higher sales in the ruminant species markets.
Increased Operating Expenses
Consolidated operating expenses for the fourth quarter were $39 million, up 6.1% compared to the prior year, due to higher transaction costs, higher compensation-related expenses, and an increase in outside services.
Higher Effective Tax Rate
The effective tax rate for the fourth quarter increased to 24.5% from 19.9% in the prior year, primarily due to an increase in certain foreign taxes.
Company Guidance
In the earnings call for Balchem's fourth quarter and full year 2024, the company reported record financial results across various metrics, showcasing strong performance in all segments. Consolidated sales for the quarter reached $240 million, a 4.9% increase year-over-year, with adjusted EBITDA hitting a record $63 million, reflecting a 13.4% increase and an adjusted EBITDA margin of 26.2%, up 200 basis points from the prior year. For the full year, Balchem achieved record sales of $954 million, a 3.4% growth, and record adjusted EBITDA of $250 million, up 8.4%. Earnings from operations for the year rose by 14.9% to $183 million. The company also generated $147 million in free cash flow, enabling a reduction in net debt to $140 million, achieving a leverage ratio of 0.6 times. The Human Nutrition & Health segment delivered strong quarterly sales growth of 6.8%, while the Animal Nutrition & Health segment showed a modest 0.3% sales growth. Specialty Products saw a 6% increase in sales due to higher performance in the Performance Gases business. Balchem also reported a 10% increase in its annual dividend, marking the 16th consecutive year of double-digit dividend growth. Looking ahead, the company anticipates continued growth in 2025 while advancing its strategic initiatives and maintaining a focus on sustainability goals.Balchem Corporate Events
Executive/Board Changes
Balchem Announces Retirement of Chief Accounting Officer
Neutral
Mar 3, 2025
On March 3, 2025, Balchem Corporation announced the upcoming retirement of William A. Backus, their Vice President and Chief Accounting Officer, effective March 31, 2026. The company stated that there will be no changes to Mr. Backus’ compensatory arrangement due to his retirement, and his successor will be announced later.
Executive/Board ChangesBusiness Operations and Strategy
Balchem Approves Executive Severance Policy and Benefits
Neutral
Feb 14, 2025
On February 12, 2025, Balchem Corporation’s Compensation Committee approved the Executive Severance Policy, offering severance benefits to executive officers terminated without cause. Additionally, the company will match contributions to the Deferred Comp Plan up to 6% of base salary for participating executive officers.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.