Aspen Pharmacare (APNHY) AI Stock Analysis

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Aspen Pharmacare

(OTC:APNHY)

Rating:73Outperform

Price Target:

$7.50

▲(11.61%Upside)

Aspen Pharmacare's overall stock score is driven by strong earnings call outcomes and reasonable valuation metrics. Financial performance is solid but hindered by declining net profit margins and cash flow issues. Technical analysis indicates a bearish trend, which slightly offsets the positive aspects.

Aspen Pharmacare (APNHY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.04B

Dividend Yield2.94%

Average Volume (3M)7.00

Price to Earnings (P/E)12.3

Beta (1Y)0.37

Revenue Growth7.29%

EPS Growth-7.24%

CountryUS

Employees8,867

SectorHealthcare

Sector Strength40

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)0.35

Shares Outstanding446,252,320

10 Day Avg. Volume21

30 Day Avg. Volume7

Financial Highlights & Ratios

PEG Ratio-1.88

Price to Book (P/B)0.93

Price to Sales (P/S)0.00

P/FCF Ratio25.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Aspen Pharmacare Business Overview & Revenue Model

Company DescriptionAspen Pharmacare Holdings Limited is a global specialty and branded pharmaceutical company, recognized as Africa's largest drug manufacturer. Established in South Africa, Aspen has a diverse portfolio that includes prescription medicines, consumer health products, and active pharmaceutical ingredients (APIs). The company's operations span multiple sectors, including anesthetics, thrombosis, and high potency and cytotoxic products, serving both developed and emerging markets worldwide.

How the Company Makes MoneyAspen Pharmacare generates revenue through the manufacture and sale of a wide range of pharmaceutical products. The company's primary revenue streams include its commercial pharmaceuticals, which encompass branded products and generics, and its manufacturing business that provides APIs and pharmaceutical finished dose forms to third parties. Aspen's earnings are bolstered by strategic partnerships and collaborations with other pharmaceutical companies, enabling it to expand its global reach and enhance its product offerings. Additionally, the company benefits from its cost-effective manufacturing capabilities and a strong presence in both emerging and established markets, which contribute significantly to its revenue growth.

Aspen Pharmacare Earnings Call Summary

Earnings Call Date:Mar 03, 2025

(Q2-2025)

% Change Since: -23.55%|

Next Earnings Date:Sep 03, 2025

Earnings Call Sentiment Neutral

Aspen's earnings call highlighted significant achievements, particularly in revenue and EBITDA growth, successful acquisitions, and promising opportunities in the GLP-1 market. However, challenges such as currency impacts, difficulties in China, and increased tax and working capital levels posed notable concerns.

Q2-2025 Updates

Positive Updates

Strong Revenue Growth

Aspen reported a 9% revenue growth at constant exchange rates (CER) and 4% in reported terms, highlighting a robust performance despite currency fluctuations.

Normalized EBITDA Surge

Normalized EBITDA increased by 21% at CER and 12% in reported terms, significantly outpacing revenue growth and demonstrating strong operational efficiency.

Commercial Pharma Performance

The Commercial Pharma segment achieved double-digit growth with revenue and EBITDA both increasing. The segment is derisked from major market headwinds, such as China VBP and Russia.

Successful LatAm Acquisition

The acquisition in Latin America was executed seamlessly, achieving over 100% of expected sales, marking a significant milestone for Aspen in the region.

GLP-1 Opportunity

Aspen is well-positioned in the GLP-1 market, with submissions underway and positive feedback from stringent regulators, marking a transformative opportunity for the company.

Sustainability Initiatives

Aspen outlined ambitious sustainability goals, including reducing carbon emissions by 50% by 2030 and achieving gender balance in top management.

Negative Updates

Currency Impact

Currency fluctuations had a significant negative impact, with a ZAR 900 million reduction in EBITDA when restating at constant exchange rates.

Challenges in China

The business environment in China remains difficult, leading to a larger-than-anticipated restructuring that will be fully implemented by the end of the next month.

Elevated Tax Rate

The effective tax rate increased to 21.6% due to higher sterile mix and the retroactive implementation of BEPS Pillar 2 legislation.

Working Capital Increase

Working capital increased to 50% of revenue, impacted by seasonal inventory buildup and the integration of Sandoz China.

Company Guidance

During the call, Aspen provided guidance for fiscal year 2025 with several key metrics. The company reported a 9% increase in revenue in constant currency and a 21% growth in normalized EBITDA at constant exchange rates, significantly surpassing revenue growth. The Commercial Pharma segment achieved double-digit growth in both revenue and EBITDA, while the Manufacturing segment saw a 65% increase in finished dose form (FDF) growth. Aspen also projected double-digit compound annual growth in EBITDA and forecasted operating cash flow conversion rates to exceed 100%. Additionally, the company highlighted its focus on the GLP-1 opportunity, anticipating first revenues in financial year 2026, with a strong contribution to future growth. The Finance cost effective interest rate was noted at approximately 5%, and the tax rate increased to 21.6%. Aspen's operating cash flow was expected to improve, targeting a working capital to revenue ratio of 45% by year-end.

Aspen Pharmacare Financial Statement Overview

Summary

Aspen Pharmacare demonstrates strong revenue growth and stable profitability, with a solid balance sheet and healthy cash flow management. There is room for improvement in operational efficiency and free cash flow.

Income Statement

Positive

Aspen Pharmacare exhibits strong gross and net profit margins, with a Gross Profit Margin of 43.51% and Net Profit Margin of 9.85% for 2024. Revenue has more than doubled from 2023 to 2024, indicating significant growth. However, the EBIT and EBITDA margins suggest room for operational efficiency improvements.

Balance Sheet

Positive

The company's balance sheet is stable with a Debt-to-Equity Ratio of 0.43 and a strong Equity Ratio of 60.99%, indicating a solid financial structure. The Return on Equity for 2024 is robust at 5.19%, but there is potential for improvement in asset utilization.

Cash Flow

Positive

Aspen Pharmacare shows healthy cash flow management with a strong Operating Cash Flow to Net Income Ratio of 1.41. However, the Free Cash Flow to Net Income Ratio is lower at 0.16, suggesting limited free cash available for discretionary spending after capital expenditures.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	44.71B	2.29B	2.54B	2.45B	2.15B
Gross Profit	19.42B	1.02B	1.15B	1.10B	1.04B
EBITDA	9.90B	9.67B	10.61B	8.85B	7.45B
Net Income	4.40B	294.16M	426.24M	286.03M	310.07M
Balance Sheet
Total Assets	139.16B	7.11B	6.80B	7.68B	7.66B
Cash, Cash Equivalents and Short-Term Investments	12.34B	577.62M	377.41M	598.51M	408.23M
Total Debt	36.46B	1.55B	1.36B	1.74B	2.44B
Total Liabilities	54.29B	2.54B	2.47B	3.09B	3.68B
Stockholders Equity	84.86B	4.56B	4.33B	4.60B	3.98B
Cash Flow
Free Cash Flow	690.00M	131.61M	175.87M	220.19M	355.52M
Operating Cash Flow	6.22B	310.59M	353.06M	442.77M	527.22M
Investing Cash Flow	-9.47B	-192.49M	-141.97M	633.38M	103.66M
Financing Cash Flow	3.62B	-23.63M	-307.20M	-1.02B	-731.78M

Aspen Pharmacare Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.72

Price Trends

50DMA

6.75

Positive

100DMA

7.93

Negative

200DMA

8.91

Negative

Market Momentum

MACD

-0.06

Negative

RSI

50.73

Neutral

STOCH

71.58

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APNHY, the sentiment is Positive. The current price of 6.72 is below the 20-day moving average (MA) of 6.75, below the 50-day MA of 6.75, and below the 200-day MA of 8.91, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 50.73 is Neutral, neither overbought nor oversold. The STOCH value of 71.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APNHY.

Aspen Pharmacare Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDY	77 Outperform	$12.41B	18.53	18.36%	0.64%	14.23%	-0.84%
APNHY	73 Outperform	$3.04B	12.35	5.32%	2.94%	7.29%	-7.24%
PRGO	63 Neutral	$3.75B	―	-3.64%	4.25%	-4.85%	-4290.31%
TEVA	57 Neutral	$19.74B	―	-18.98%	―	3.38%	-175.90%
AMRX	56 Neutral	$2.57B	―	106.97%	―	13.42%	92.50%
VTRS	54 Neutral	$10.77B	―	-21.25%	5.14%	-6.88%	-6809.78%
Sector *	51 Neutral	$7.50B	0.32	-61.87%	2.27%	17.10%	1.59%

* Healthcare Sector Average

Performance Comparison

APNHY

Aspen Pharmacare

6.80

-5.74

-45.77%

RDY

Dr Reddy's Laboratories

14.88

-0.65

-4.19%

VTRS

Viatris

9.34

-0.51

-5.18%

PRGO

Perrigo Company

27.26

2.82

11.54%

TEVA

Teva Pharmaceutical

17.05

0.65

3.96%

AMRX

Amneal Pharmaceuticals

8.37

1.70

25.49%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025