Phibro Animal Health (PAHC) AI Stock Analysis

• Market Cap: $700.31M
• Dividend Yield: 2.78%
• Average Volume (3M): 243.37K
• Price to Earnings (P/E): 36.3
• Beta (1Y): 0.93
• Revenue Growth: 12.63%
• EPS Growth: 30.51%
• Country: US
• Employees: 1,940
• Sector: Healthcare
• Sector Strength: 66
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.48
• Shares Outstanding: 20,337,574
• 10 Day Avg. Volume: 245,832
• 30 Day Avg. Volume: 243,374
• PEG Ratio: 1.19
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.80
• Price to Cash Flow (P/CF): 72.10
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $21.25
• Price Target Upside: 28.55% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

Phibro Animal Health's overall score reflects solid revenue growth and strong cash flow management, tempered by challenges in profitability and high financial leverage. While the earnings call provided positive guidance and growth prospects, the current technical indicators suggest bearish sentiment. The high P/E ratio raises valuation concerns, despite a reasonable dividend yield. Investors should weigh these factors carefully.

Positive Factors

Earnings

Phibro Animal Health reported strong results with revenues of $309.3 million and adjusted EPS ahead of estimates.

Financial Performance

Adjusted gross margins and operating margins improved significantly, benefiting from the close of the MFA assets acquisition.

Negative Factors

Growth and Profitability

The recommendation remains 'Underperform' due to Phibro Animal Health's below-peer growth and profitability profiles.

Growth Potential

The stock price is currently above the price objective, indicating limited upside potential according to the analysis.

Phibro Animal Health Business Overview & Revenue Model

Company Description

Phibro Animal Health Corporation develops, manufactures, and supplies a range of animal health and mineral nutrition products for livestock primarily in the United States. It operates through three segments: Animal Health, Mineral Nutrition, and Performance Products. The company develops, manufactures, and markets products for a range of food animals, including poultry, swine, beef and dairy cattle, and aquaculture. Its animal health products also comprise antibacterials that are biological or chemical products used in the animal health industry to treat or to prevent bacterial diseases; anticoccidials primarily used to prevent and control the disease coccidiosis in poultry and cattle; anthelmintics to treat infestations of parasitic intestinal worms; and anti-bloat treatment products for cattle to control bloat in animals grazing on legume or wheat-pasture. In addition, the company offers nutritional specialty products, which enhance nutrition to help improve health and performance; and vaccines to prevent diseases primarily for the poultry and swine markets. Further, it manufactures and markets formulations and concentrations of trace minerals, such as zinc, manganese, copper, iron, and other compounds; and various specialty ingredients for use in the personal care, industrial chemical, and chemical catalyst industries. The company sells its animal health and mineral nutrition products through local sales offices to integrated poultry, swine, and cattle integrators, as well as through commercial animal feed manufacturers, wholesalers, and distributors. It operates in the United States, Latin America, Canada, Europe, the Middle East, Africa, and the Asia Pacific. The company was formerly known as Philipp Brothers Chemicals, Inc. and changed its name to Phibro Animal Health Corporation in July 2003. Phibro Animal Health Corporation was incorporated in 2014 and is headquartered in Teaneck, New Jersey.

How the Company Makes Money

Phibro Animal Health Corporation generates revenue primarily through the sale of its animal health and mineral nutrition products. The company's key revenue streams are derived from its three main business segments: Animal Health, Mineral Nutrition, and Performance Products. In the Animal Health segment, the company sells medicated feed additives, vaccines, and nutritional specialty products that are essential for maintaining the health and productivity of livestock. The Mineral Nutrition segment provides customers with essential nutritional products, such as trace minerals and specialty ingredients, that are vital for animal growth and health. The Performance Products segment includes sales of specialty chemicals used in various industrial applications, though it contributes a smaller portion to overall revenue. Phibro's earnings are influenced by factors such as global demand for animal protein, regulatory changes, and its strategic partnerships and collaborations with distributors and other industry players.

Phibro Animal Health Financial Statement Overview

Summary

Phibro Animal Health shows strong revenue growth and positive cash flow management. However, the company faces challenges with low profitability margins and high financial leverage, which may pose risks to its financial health.

Income Statement

Phibro Animal Health has shown a steady increase in total revenue over the years, with a notable revenue growth rate in the TTM period compared to the previous annual report. However, the net profit margin and EBIT margin are relatively low, indicating challenges in maintaining profitability. Gross profit margin remains stable, reflecting efficient cost management.

Balance Sheet

The company maintains a high debt-to-equity ratio, raising concerns about financial leverage and risk. However, the equity ratio is reasonable, showing that a fair portion of the company's assets is financed by equity. Return on equity (ROE) has been declining, which could impact future investment returns.

Cash Flow

Phibro Animal Health has managed to generate positive free cash flow in the TTM period, indicating improved cash management. The operating cash flow to net income ratio is strong, suggesting efficient conversion of net income into cash. However, fluctuations in free cash flow growth rates highlight potential volatility in cash flow generation.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.11B	1.02B	977.89M	942.30M	833.40M	800.40M
	Gross Profit
351.01M	313.09M	298.24M	285.40M	271.40M	256.90M
	EBIT
76.06M	53.31M	71.85M	46.30M	43.02M	36.86M
	EBITDA
107.47M	69.06M	116.63M	114.82M	105.50M	102.16M
	Net Income Common Stockholders
19.32M	2.42M	32.61M	49.17M	54.38M	33.55M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.47M	114.61M	81.28M	91.25M	93.21M	91.34M
	Total Assets
480.83M	982.18M	971.40M	931.70M	841.33M	784.10M
	Total Debt
363.82M	525.46M	509.97M	470.48M	426.71M	410.72M
	Net Debt
333.35M	454.85M	468.69M	396.24M	376.49M	374.38M
	Total Liabilities
544.36M	725.54M	688.89M	669.26M	602.80M	595.90M
	Stockholders Equity
-63.53M	256.64M	282.51M	262.44M	238.53M	188.20M
Cash Flow		Free Cash Flow
15.33M	46.36M	-38.48M	-5.39M	18.99M	25.30M
	Operating Cash Flow
55.53M	87.59M	13.31M	31.65M	48.31M	59.35M
	Investing Cash Flow
-271.38M	-48.19M	-74.02M	-22.58M	-18.58M	-120.39M
	Financing Cash Flow
253.76M	-6.77M	26.99M	16.34M	-17.00M	40.94M

Phibro Animal Health Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAHC, the sentiment is Negative. The current price of 16.53 is below the 20-day moving average (MA) of 19.46, below the 50-day MA of 21.67, and below the 200-day MA of 21.25, indicating a bearish trend. The MACD of -1.41 indicates Positive momentum. The RSI at 30.82 is Neutral, neither overbought nor oversold. The STOCH value of 15.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PAHC.

Phibro Animal Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IRMD	79 Outperform	$658.26M	34.41	24.31%	1.20%	11.71%	11.28%
HSTM	73 Outperform	$988.41M	49.44	5.72%	0.35%	4.51%	32.28%
PNTG	70 Outperform	$907.29M	36.96	10.40%	―	27.59%	61.97%
PAHC	60 Neutral	$700.31M	36.32	7.46%	2.78%	12.63%	30.51%
Sector *	51 Neutral	$5.19B	3.13	-40.94%	2.95%	17.94%	2.00%
OFIX	47 Neutral	$508.46M	―	-22.87%	―	7.08%	20.45%
OMI	45 Neutral	$535.37M	―	-48.70%	―	3.55%	-757.75%

Phibro Animal Health Corporate Events

Phibro Animal Health Announces Leadership Transition Plans

Phibro Animal Health Corporation announced that Rob Aukerman will retire as President of the North America Region by the end of 2024, while Todd Armstrong, Vice President of the US Ruminant Business, will succeed him starting January 2025. Aukerman will remain with the company until mid-2025 to facilitate a smooth transition.

Phibro Animal Health Expands Portfolio with Zoetis Acquisition

Phibro Animal Health Corporation has acquired Zoetis Inc.’s medicated feed additives and water-soluble products for $350 million, marking a major step in enhancing its global animal health and nutrition capabilities. This acquisition, featuring over 37 product lines and a presence in around 80 countries, is expected to boost Phibro’s profitability and expand its product offerings across cattle, swine, and poultry sectors. The deal is anticipated to diversify Phibro’s revenue base and support future investments in the fast-growing animal health industry.