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Phibro Animal Health Q1 Earnings: Can NasdaqGM:PAHC Hit Its $0.23 EPS Target?

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Phibro Animal Health Corporation (NasdaqGM:PAHC) is scheduled to report Q1 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.23/share on revenue of $189.1 million. The consensus earnings per share (EPS) of $0.23/share is based on a poll of 5 analysts and represents a growth in eps of 23.2% over the same quarter last year, when the company reported earnings of $0.19/share.

The revenue forecast of $189.1 million based on a poll of 3 analysts implies a year-over-year (YoY) decline in revenue of −0.3%. Last year the company reported $189.7 million in revenue for the quarter.

Expected to report EPS growth of 23.2% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $189.08 $189.70 −0.3%
EPS $0.23 $0.19 23.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, and missed expectations 6 quarters.

What are your expectations from Phibro Animal Health Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 $0.22 $0.17 −22.5% Missed
Q3, 2020 $0.34 $0.38 11.8% Beat
Q2, 2020 $0.29 $0.34 18.9% Beat
Q1, 2020 $0.24 $0.19 −21.5% Missed
Q4, 2019 $0.36 $0.33 −8.8% Missed
Q3, 2019 $0.43 $0.39 −9.5% Missed
Q2, 2019 $0.43 $0.41 −4.7% Missed
Q1, 2019 $0.41 $0.39 −4.1% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 26, 2020 $20.51 $20.69 0.9% Increase
May 7, 2020 $23.66 $22.57 −4.6% Decline
February 3, 2020 $23.72 $27.72 16.9% Increase
November 4, 2019 $24.31 $22.33 −8.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.78, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.78 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Phibro Animal Health Corporation is currently trading at $17.20/share, down −4.2% for the day. The company is trading at approximately 58.7% of its 52-week high of $29.38/share. The company’s stock price is down −16.9% since the last earnings report and down −2.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 47.82 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:PAHC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 20.82 and a forward P/E multiple of 14.37.

Phibro Animal Health Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.71. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $17.20
P/E Ratio 20.8x
P/E Ratio (Fwd) 14.4x
PEG Ratio −0.6
Total Debt / Total Capital 36.7%
Levered Free Cash Flow $25.303 million
EV / EBITDA 10.4x

Finbox

Phibro Animal Health Corporation is a small-cap stock with a market capitalization of $726.1 million and a total enterprise value of $1.055 billion. The company operates in the Healthcare sector and the Pharmaceuticals industry.

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 also operates in 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.

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