Balchem (BCPC) AI Stock Analysis

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Balchem

(NASDAQ:BCPC)

78Outperform

Balchem's overall stock score reflects its strong financial performance and positive earnings call results, which are the most significant factors supporting its high score. However, technical analysis reveals mixed signals, and the high P/E ratio suggests overvaluation, slightly offsetting the positives.

Positive Factors

Earnings

Balchem's revenue and earnings beat expectations, showing resilience to macro pressures.

Product Development

Balchem recently unveiled two new solutions, K2Vital Delta Fermented and VitaCholine Pro-Flo, which are expected to drive uptake and market demand.

Strategic Partnerships

The partnership with FC Bayern Women marks a key milestone in Balchem’s longer-term strategy to bridge the gap between B2B and B2C markets.

Negative Factors

Earnings Miss

Balchem's 4Q24 GAAP net earnings came in somewhat below the forecasted amount, indicating a moderate earnings miss.

Financial Performance

Macro pressures and market volatility have impacted share prices and revenue and earnings multiples.

Valuation

The applicable P/E multiple has declined to 38.8x from the prior 45x, resulting in a decrease in the 12-month price target to $180 from the previous $190.

Balchem (BCPC) vs. S&P 500 (SPY)

Market Cap

$5.34B

Dividend Yield0.53%

Average Volume (3M)207.16K

Price to Earnings (P/E)39.0

Beta (1Y)0.75

Revenue Growth3.76%

EPS Growth18.06%

CountryUS

Employees1,379

SectorBasic Materials

Sector Strength60

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.13

Shares Outstanding32,617,302

10 Day Avg. Volume222,907

30 Day Avg. Volume207,156

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.05

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit16.67

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$198.00

Price Target Upside19.87% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Balchem Business Overview & Revenue Model

Company DescriptionBalchem Corporation (BCPC) is a publicly traded company specializing in niche markets within the health and nutrition sectors. The company operates through three primary segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. Balchem's offerings include microencapsulation, chelated mineral solutions, and specialty ingredients, serving industries ranging from food and beverage to pharmaceuticals and animal feed.

How the Company Makes MoneyBalchem Corporation generates revenue through the sale of its specialized products and solutions across its three main segments. In the Human Nutrition & Health segment, the company sells ingredients used in dietary supplements, food, and beverage products, focusing on enhancing health and wellness. The Animal Nutrition & Health segment offers nutritional products and supplements for livestock and poultry, aiming to improve animal health and productivity. In the Specialty Products segment, Balchem provides products like ethylene oxide for medical device sterilization and choline-based compounds for industrial applications. The company's earnings are bolstered by strategic partnerships with major industry players and ongoing innovation to meet evolving market demands.

Balchem Financial Statement Overview

Summary

Balchem showcases a solid financial performance with strong revenue growth and profitability. The company's low leverage and high equity ratio provide financial stability and flexibility. Despite a decline in free cash flow growth, cash flow metrics remain strong, reflecting efficient cash management. Overall, Balchem is well-positioned in the Chemicals - Specialty industry.

Income Statement

Very Positive

Balchem demonstrates strong and consistent revenue growth with a TTM revenue increase of 1.14% over the previous year. Gross Profit Margin stands at 35.55%, indicating effective cost management, while the Net Profit Margin is 14.16%, showing robust bottom-line performance. The EBIT Margin is 19.95%, and the EBITDA Margin is 22.32%, reflecting solid operational efficiency.

Balance Sheet

Very Positive

The company maintains a low Debt-to-Equity Ratio of 0.03, indicating conservative leverage practices. Return on Equity is a healthy 11.29%, showcasing efficient use of equity capital. The Equity Ratio is 74.73%, suggesting a strong capital structure with significant equity financing, enhancing financial stability.

Cash Flow

Very Positive

Balchem's Free Cash Flow Growth Rate is negatively impacted compared to the previous year, but the company shows an impressive Operating Cash Flow to Net Income Ratio of 1.36, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is 1.14, underscoring efficient cash conversion.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
953.68M	922.44M	942.36M	799.02M	703.64M
	Gross Profit
336.21M	302.06M	280.45M	243.17M	223.90M
	EBIT
182.91M	159.19M	145.19M	127.50M	111.15M
	EBITDA
230.95M	214.81M	197.57M	175.70M	162.13M
	Net Income Common Stockholders
128.47M	108.54M	105.37M	96.10M	84.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
49.52M	64.45M	66.56M	103.24M	84.57M
	Total Assets
1.58B	1.60B	1.62B	1.20B	1.17B
	Total Debt
208.04M	330.33M	440.57M	108.57M	163.57M
	Net Debt
158.53M	265.89M	374.01M	5.33M	79.00M
	Total Liabilities
425.46M	543.23M	686.23M	322.31M	337.61M
	Stockholders Equity
1.15B	1.05B	938.28M	877.01M	828.23M
Cash Flow		Free Cash Flow
146.34M	145.87M	88.25M	123.06M	116.67M
	Operating Cash Flow
182.00M	183.76M	138.54M	160.51M	150.49M
	Investing Cash Flow
-59.74M	-34.81M	-416.01M	-35.30M	-34.59M
	Financing Cash Flow
-133.81M	-153.32M	246.68M	-102.18M	-101.16M

Balchem Technical Analysis

Technical Analysis Sentiment

Positive

Last Price165.18

Price Trends

50DMA

163.50

Positive

100DMA

163.30

Positive

200DMA

167.80

Negative

Market Momentum

MACD

0.26

Negative

RSI

59.15

Neutral

STOCH

90.97

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BCPC, the sentiment is Positive. The current price of 165.18 is above the 20-day moving average (MA) of 159.52, above the 50-day MA of 163.50, and below the 200-day MA of 167.80, indicating a neutral trend. The MACD of 0.26 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 90.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BCPC.

Balchem Risk Analysis

Balchem disclosed 26 risk factors in its most recent earnings report. Balchem reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Balchem Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEU	80 Outperform	$5.94B	12.46	35.85%	1.63%	3.65%	20.92%
BCPC	78 Outperform	$5.34B	38.97	11.94%	0.53%	3.76%	18.06%
AXTA	76 Outperform	$7.27B	18.73	23.59%	―	0.96%	82.78%
SXT	74 Outperform	$4.02B	31.01	11.87%	1.74%	6.30%	41.01%
ESI	72 Outperform	$5.02B	17.72	11.75%	1.53%	6.08%	117.61%
CBT	72 Outperform	$3.93B	10.03	30.57%	2.37%	-0.05%	-2.76%
Sector *	49 Neutral	$1.94B	-1.23	-21.28%	3.73%	1.19%	-29.73%

* Basic Materials Sector Average

Performance Comparison

BCPC

Balchem

165.18

9.56

6.14%

CBT

Cabot

74.31

-25.85

-25.81%

NEU

Newmarket

633.70

79.71

14.39%

SXT

Sensient Technologies

95.33

20.19

26.87%

ESI

Element Solutions

21.33

-2.31

-9.77%

AXTA

Axalta Coating Systems

31.27

-4.77

-13.24%

Balchem Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 4.34%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Positive

Balchem Corporation showcased strong financial performance with record sales and significant growth across all segments. The company effectively managed costs and showed resilience in a challenging global trade environment. While there are some concerns regarding potential impacts from trade policies and increased tax rates, the overall performance and strategic positioning indicate a robust start to the fiscal year.

Q1-2025 Updates

Positive Updates

Record First Quarter Consolidated Sales

Balchem Corporation reported record first quarter consolidated revenue of $251 million, which was 4.5% higher than the prior year quarter.

Substantial Growth in Adjusted EBITDA

The company delivered a record quarterly adjusted EBITDA of $66 million, an increase of 8.9% with an adjusted EBITDA margin of 26.5%, up 106 basis points from the prior year.

Significant Increase in Net Income

Consolidated net income for the quarter was $37 million, an increase of 27.8% from the prior year.

Strong Performance Across All Segments

All three segments, Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products, showed year-over-year sales and earnings growth.

Decreased Operating Expenses

Consolidated operating expenses for the first quarter were $37 million compared to $40 million in the prior year, primarily due to lower amortization expense and a decrease in compensation-related costs.

Negative Updates

Potential Impact of Global Trade Environment

The evolving global trade environment could impact Balchem's raw material imports and global demand, although current impacts are manageable.

Increased Effective Tax Rate

The effective tax rate for the first quarter of 2025 was 22.7%, up from 21.3% in the prior year, primarily due to lower tax benefits from stock-based compensation.

Company Guidance

During Balchem's First Quarter 2025 Earnings Conference Call, the company reported robust financial results, continuing the momentum from 2024. The first quarter saw record consolidated sales of $251 million, a 4.5% increase from the previous year, alongside an adjusted EBITDA of $66 million, marking an 8.9% rise with an adjusted EBITDA margin of 26.5%. Consolidated net income reached $37 million, a 27.8% increase, translating to a diluted net earnings per share of $1.13, a $0.24 rise. The Human Nutrition & Health segment reported record sales of $158 million, up 3.7%, and Animal Nutrition & Health sales rose by 6.2% to $57 million. Specialty Products also saw a 5.3% increase in sales, totaling $33 million. Balchem emphasized their strong market positions and resilience amidst a changing global trade environment, with strategies to offset impacts of tariffs and trade disputes. They maintained a solid balance sheet, with net debt of $140 million and an effective tax rate of 22.7%, up from 21.3% the previous year.

Balchem Corporate Events

Executive/Board Changes

Balchem Announces Retirement of Chief Accounting Officer

Neutral

Mar 3, 2025

On March 3, 2025, Balchem Corporation announced the upcoming retirement of William A. Backus, their Vice President and Chief Accounting Officer, effective March 31, 2026. The company stated that there will be no changes to Mr. Backus’ compensatory arrangement due to his retirement, and his successor will be announced later.

Executive/Board ChangesBusiness Operations and Strategy

Balchem Approves Executive Severance Policy and Benefits

Neutral

Feb 14, 2025

On February 12, 2025, Balchem Corporation’s Compensation Committee approved the Executive Severance Policy, offering severance benefits to executive officers terminated without cause. Additionally, the company will match contributions to the Deferred Comp Plan up to 6% of base salary for participating executive officers.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.