Phibro Animal Health Corp (NASDAQ: PAHC)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0001069899
Market Cap 1.52 Bn
P/B 4.87
P/E 22.37
P/S 1.08
ROIC (Qtr) 10.23
Div Yield % 1.61
Rev 1y % (Qtr) 39.73
Total Debt (Qtr) 742.96 Mn
Debt/Equity (Qtr) 2.38

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 72.77M provide 3.95x coverage of short-term debt 18.44M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 76.80M provides strong 87.58x coverage of stock compensation 877000, indicating sustainable incentive practices.
  • Tangible assets of 1.29B provide robust 10.66x coverage of other current liabilities 121.10M, indicating strong asset backing.
  • Cash reserves of 72.77M provide solid 0.92x coverage of other non-current liabilities 79.19M, indicating strong liquidity.
  • Retained earnings of 294.36M represent substantial 0.94x of equity 311.68M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 76.80M barely covers its investment activities of (306.77M), with a coverage ratio of -0.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 72.77M against inventory of 471.77M, the 0.15 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 76.80M provides thin coverage of dividend payments of (19.45M) with a -3.95 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 72.77M provide limited coverage of acquisition spending of (286.53M), which is -0.25x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 133.66M show weak coverage of depreciation charges of 49.43M, with a 2.70 ratio indicating high capital intensity and potential reinvestment needs.

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 1.56 24.98
EV to Cash from Ops. EV/CFO 28.22 -85.40
EV to Debt EV to Debt 2.92 265.88
EV to EBIT EV/EBIT 16.22 -32.65
EV to EBITDA EV/EBITDA 11.21 -29.50
EV to Free Cash Flow [EV/FCF] EV/FCF 63.22 -32.62
EV to Market Cap EV to Market Cap 1.43 -10.98
EV to Revenue EV/Rev 1.55 -700.14
Price to Book Value [P/B] P/B 4.87 27.22
Price to Earnings [P/E] P/E 22.37 -122.96
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.49 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 28.70 4.81
Dividend per Basic Share Div per Share (Qtr) 0.48 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 56.74 4.08
Interest Coverage Int. cover (Qtr) 3.43 -38.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.91 -157.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 40.38 44,776.25
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 230.54 24.45
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 79.04 18.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 146.93 37.66
EBT Growth (1y) % EBT 1y % (Qtr) 191.07 108.18
EPS Growth (1y) % EPS 1y % (Qtr) 288.37 52.88
FCF Growth (1y) % FCF 1y % (Qtr) -15.70 -54.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 32.65 25.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.01 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.16 0.02
Cash Ratio Cash Ratio (Qtr) 0.27 2.10
Current Ratio Curr Ratio (Qtr) 3.09 3.92
Debt to Equity Ratio Debt/Equity (Qtr) 2.38 -1.11
Interest Cover Ratio Int Coverage (Qtr) 3.43 -38.10
Times Interest Earned Times Interest Earned (Qtr) 3.43 -38.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.10 -62,432.09
EBIT Margin % EBIT Margin % (Qtr) 9.55 -63,260.88
EBT Margin % EBT Margin % (Qtr) 6.76 -66,726.96
Gross Margin % Gross Margin % (Qtr) 31.20 8,332.72
Net Profit Margin % Net Margin % (Qtr) 4.80 -66,728.37