Phibro Animal Health PAHC has seen impressive momentum in the past year, with its shares soaring 82.8%. It has significantly outperformed the 9.6% rise of the industry and the S&P 500 Composite’s 26.7% gain.
Presently carrying a Zacks Rank #3 (Hold), the diversified animal health and mineral nutrition company is benefiting from the remarkable performance of the Animal Health business. Phibro is well-positioned to pursue global growth opportunities, while the resilience of the Mineral Nutrition arm is highly encouraging.
Headquartered in New Jersey, Phibro provides a broad range of products for food animals, including poultry, swine, beef and dairy cattle and aquaculture. In addition to animal health and mineral nutrition products, the company manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries. Phibro’s business is currently concentrated in the livestock sector.
Factors Favoring PAHC’s Growth
The rally in the company’s share price can be linked to the strength in the Animal Health business. Phibro’s key animal health products, including MFAs (Medicated Feed Additives) and nutritional specialty products facilitate in enhancing animal nutrition, while nutritional product offerings, such as OmniGen-AF and Animate, are gaining traction in the global dairy industry. Simultaneously, the company is developing its companion animal business and pipeline, positioning itself for growth in the short and medium term.
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Furthermore, Phibro’s extensive presence in more than 80 countries, supported by its established sales, marketing and distribution network, provides it ample scope to take advantage of global growth opportunities. The company operates in key high-growth regions (countries where the livestock production growth rate is expected to be higher than the average growth rate), such as Brazil and other countries in South America, China, India and Southeast Asia, and other countries in Africa. In the fiscal first quarter of 2025, the company’s international operations contributed approximately 44.9% to its total revenues.
Additionally, Phibro makes significant investments to expand vaccine manufacturing capacity at several locations. The vaccine business witnessed a robust 22% improvement in the first quarter of fiscal 2025, driven by a strong uptake across various regions, especially in Latin America. It also benefited from growing domestic and international demand. The company launched new commercial vaccines and looks forward to bringing additional vaccines to the Americas.
Investors are also upbeat about the performance of Phibro’s Mineral Nutrition business, which showed resilience in a tough macro environment. The growth was primarily backed by an increased demand for trace minerals. Fiscal first-quarter sales of Performance Products increased 27% year over year owing to the rising demand for personal care product ingredients.
Risks for PAHC
Phibro’s business remains vulnerable to economic sanctions, bans and broader military conflicts, such as between Russia and Ukraine, as well as supply-chain and logistics disruptions and heightened cybersecurity threats. These may negatively impact the overall operational results of the company.
A Glance at PAHC’s Estimates
The Zacks Consensus Estimate for Phibro’s fiscal 2025 and 2026 earnings per share (EPS) is expected to increase 36.1% and 17.9% year over year, respectively, to $1.62 and $1.91. In the past 30 days, the Zacks Consensus Estimate for the company's fiscal 2024 EPS has increased 1 cent.
Revenues for fiscal 2025 are projected to grow 15.7% to $1.18 billion, while the same for fiscal 2026 is expected to reach $1.36 billion.
Key MedTech Stocks
Some better-ranked stocks in the broader medical space are Veracyte VCYT, Haemonetics HAE and Boston Scientific BSX.
Veracyte has an estimated 2024 earnings growth rate of 37.2% compared with the industry’s 15.3%. Veracyte’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 520.6%. Its shares have risen 44.5% compared to the industry’s 3.6% growth in the past year.
VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics, carrying a Zacks Rank #2 at present, has an estimated fiscal 2025 earnings growth rate of 15.9% compared with the industry’s 12.3%. Shares of the company have lost 8.3% against the industry’s 9.7% growth. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 2.82%.
Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 54.4% compared with the industry’s 9.7% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.29%.
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