Bausch Health Companies Inc. (NYSE: BHC)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0000885590
Market Cap 2.59 Bn
P/B -4.59
P/E 7.16
P/S 0.26
ROIC (Qtr) 7.59
Div Yield % 0.00
Rev 1y % (Qtr) 6.81
Total Debt (Qtr) 21.04 Bn
Debt/Equity (Qtr) -37.24

About

Bausch Health Companies Inc., known by its stock symbol BHC, is a global entity that operates within the specialized pharmaceutical and medical device industry, with a focus on therapeutic areas such as gastroenterology, hepatology, neurology, and dermatology. The company's operations span across various countries and regions, generating revenue through the sale of branded, generic, and branded generic pharmaceuticals, over-the-counter (OTC) products, and aesthetic medical devices. Bausch Health Companies Inc. has a diverse product portfolio, which...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 1.34B provide 2.31x coverage of short-term debt 579M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 1.08B exceeds capital expenditure of 422M by 2.57x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 10.71B provides 7.35x coverage of working capital 1.46B, indicating strong operational backing.
  • Operating cash flow of 1.51B fully covers other non-current liabilities 1.21B by 1.24x, showing strong long-term stability.
  • Retained earnings of (9.55B) represent substantial 16.91x of equity (565M), indicating strong internal capital generation.

Bear case

  • Operating cash flow of 1.51B barely covers its investment activities of (513M), with a coverage ratio of -2.94, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (513M) provide weak support for R&D spending of 631M, which is -0.81x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.34B provide limited coverage of acquisition spending of (101M), which is -13.27x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 2.10B show weak coverage of depreciation charges of 1.23B, with a 1.72 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.08B represents just -3.02x of debt issuance (359M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Drug Manufacturers - Specialty & Generic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ZTS Zoetis Inc. 56.15 Bn 21.18 5.98 7.27 Bn
2 TAK Takeda Pharmaceutical Co Ltd 48.92 Bn 221.13 1.66 36.24 Bn
3 HLN Haleon plc 46.13 Bn 25.59 3.29 -
4 TEVA Teva Pharmaceutical Industries Ltd 35.27 Bn 49.54 2.10 17.07 Bn
5 UTHR UNITED THERAPEUTICS Corp 21.76 Bn 17.11 6.95 0.00 Bn
6 VTRS Viatris Inc 14.87 Bn -4.03 1.05 14.44 Bn
7 NBIX Neurocrine Biosciences Inc 14.08 Bn 32.91 5.25 0.43 Bn
8 ELAN Elanco Animal Health Inc 11.64 Bn 323.29 2.54 4.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.84 24.98
EV to Cash from Ops. EV/CFO 15.00 -85.40
EV to Debt EV to Debt 1.07 265.88
EV to EBIT EV/EBIT 10.73 -32.65
EV to EBITDA EV/EBITDA 7.24 -29.50
EV to Free Cash Flow [EV/FCF] EV/FCF 20.84 -32.62
EV to Market Cap EV to Market Cap 8.71 -10.98
EV to Revenue EV/Rev 2.25 -700.14
Price to Book Value [P/B] P/B -4.59 27.22
Price to Earnings [P/E] P/E 7.16 -122.96
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.08
Interest Coverage Int. cover (Qtr) 1.36 -38.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -11.94 -157.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 78.67 44,776.25
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -94.56 24.45
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.30 18.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 49.93 37.66
EBT Growth (1y) % EBT 1y % (Qtr) 5,710.00 108.18
EPS Growth (1y) % EPS 1y % (Qtr) 306.38 52.88
FCF Growth (1y) % FCF 1y % (Qtr) 7.43 -54.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.56 25.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.37 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.28 2.10
Current Ratio Curr Ratio (Qtr) 1.30 3.92
Debt to Equity Ratio Debt/Equity (Qtr) -37.24 -1.11
Interest Cover Ratio Int Coverage (Qtr) 1.36 -38.10
Times Interest Earned Times Interest Earned (Qtr) 1.36 -38.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.20 -62,432.09
EBIT Margin % EBIT Margin % (Qtr) 20.99 -63,260.88
EBT Margin % EBT Margin % (Qtr) 5.59 -66,726.96
Gross Margin % Gross Margin % (Qtr) 70.70 8,332.72
Net Profit Margin % Net Margin % (Qtr) 3.60 -66,728.37