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Hikma Pharma (HKMPY)
:HKMPY
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Hikma Pharmaceuticals
(OTC:HKMPY)
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Rating:71Outperform
Price Target:
$52.00
▲(19.82% Upside)
Hikma Pharmaceuticals' overall stock score is driven by strong financial performance and optimistic earnings guidance. However, technical analysis indicates current bearish momentum, and some operational challenges were noted in the earnings call. The valuation remains fair, supported by a reasonable P/E ratio and attractive dividend yield.
Hikma Pharmaceuticals (HKMPY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.78B
Dividend Yield3.83%
Average Volume (3M)324.00
Price to Earnings (P/E)13.0
Beta (1Y)0.30
Revenue Growth7.03%
EPS Growth31.08%
CountryUS
Employees9,500
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)2.17
Shares Outstanding110,943,230
10 Day Avg. Volume905
30 Day Avg. Volume324
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.55
Enterprise Value/Revenue2.38
Enterprise Value/Gross Profit5.41
Enterprise Value/Ebitda10.05
Forecast
1Y Price Target
$52.00Price Target Upside19.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Hikma Pharmaceuticals Business Overview & Revenue Model
Company DescriptionHikma Pharmaceuticals PLC is a multinational pharmaceutical company headquartered in London, UK, specializing in the development, manufacture, and marketing of a diverse range of generic and branded pharmaceuticals. The company operates primarily in three segments: Injectables, Branded, and Generics, offering a wide portfolio of products across various therapeutic areas, including oncology, respiratory, and cardiovascular diseases. Hikma is committed to improving patient access to quality medicines and focuses on innovation and operational excellence to enhance its product offerings.
How the Company Makes MoneyHikma Pharmaceuticals generates revenue through multiple key streams, primarily by selling its generic and branded pharmaceutical products across various markets. The Injectables segment, which includes a comprehensive range of injectable medications, is particularly significant and has been a major driver of the company's growth due to the high demand for these products in hospitals and healthcare settings. The Branded segment contributes to revenue through established and new brand medications in emerging markets, while the Generics segment focuses on cost-effective alternatives to branded drugs in developed markets. Additionally, Hikma has formed strategic partnerships and collaborations with other pharmaceutical companies, expanding its market reach and enhancing its product pipeline, which further supports its revenue growth. The company also benefits from economies of scale in manufacturing and distribution, enabling it to maintain competitive pricing and improve profit margins.
Hikma Pharmaceuticals Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance for Hikma in the first half of 2025. While there was notable revenue growth and strategic advancements, challenges such as declining core operating profit and increased costs impacted overall performance. However, the company maintains a positive outlook for the second half, supported by strategic investments and robust balance sheet management.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Hikma delivered a 6% revenue growth driven by robust volumes across all business segments and regions, with recent launches and the Xellia acquisition contributing to growth.
Injectables Segment Performance
Injectables segment showed consistent strong momentum with a 12% core revenue growth year-on-year, supported by the Xellia acquisition and strong demand in Europe and MENA.
Strategic Partnerships and Pipeline Expansion
Hikma signed new strategic partnerships and enhanced manufacturing capabilities, significantly expanding its pipeline and positioning for future growth.
Strong Performance in Europe and MENA
European revenue grew by 26% and MENA by 16% in the Injectables segment, driven by expanding portfolios and market shortages.
Branded Segment Growth
The Branded segment delivered 4% top-line growth and 3% operating profit growth, maintaining a strong position as the second largest pharmaceutical company in MENA.
Robust Balance Sheet
Hikma maintained a robust balance sheet with a leverage ratio below 2x at 1.7x net debt to core EBITDA, despite higher debt utilization for acquisitions.
Negative Updates
Decline in Core Operating Profit
Core operating profit declined by 7% in the first half of 2025 due to regional and product mix, FX headwinds, and a strong comparator in 2024.
Decrease in Core EBITDA and Earnings Per Share
There was a 5% year-on-year decline in core EBITDA and core basic earnings per share for the first half of 2025.
Increased Operating Costs
Operating profit margins in the Injectables segment decreased from 36.3% in H1 2024 to 30% in H1 2025 due to product and geographic mix changes and euro appreciation.
Rx Segment Gross Profit Contraction
The Rx segment experienced an 11% year-on-year contraction in gross profit due to price erosion and competitive dynamics.
Operating Cash Flow Decline
Operating cash flow decreased from $198 million in H1 2024 to $161 million in H1 2025, influenced by the timing of tax payments.
Company Guidance
The guidance provided during the Hikma 2025 half-year results presentation highlighted robust metrics across various segments. The company achieved a 6% revenue growth driven by strong volumes and successful launches, despite a 7% decline in core operating profit to $373 million due to regional and product mix challenges, FX headwinds, and strong previous year comparisons. Core EBITDA and core basic earnings per share both saw a 5% year-on-year decline. The Injectables segment experienced a 12% revenue increase with a 30% core operating margin, albeit lower than the previous year's 36.3%, influenced by product mix and euro appreciation. The Branded business reported a 4% revenue growth and a 3% operating profit increase, maintaining a 30% operating margin, while the Rx division faced an 11% gross profit contraction due to pricing pressures. Operational cash flow decreased to $161 million from $198 million, impacted by tax payment timing. The company reiterated its full-year guidance with a 4% to 6% revenue growth expectation and a core operating profit range of $730 million to $770 million, adjusting segmental margins due to currency and cost pressures. Investments in R&D and manufacturing, alongside strategic partnerships, are set to drive future growth, with a low leverage ratio of 1.7x supporting continued financial stability.Hikma Pharmaceuticals Financial Statement Overview
Summary
Hikma Pharmaceuticals shows strong financial health with significant revenue and profit growth, supported by robust margins. The balance sheet is stable, but monitoring debt levels is advised. Cash flows are positive, though capital expenditure management could be optimized.Income Statement
Hikma Pharmaceuticals demonstrates strong revenue growth, with a notable increase from $2.875 billion in 2023 to $3.127 billion in 2024, marking a revenue growth rate of 8.75%. Gross profit margin remains robust at 45.26% in 2024. The company also shows improvement in profitability with a net profit margin of 11.48% compared to 6.61% the previous year. EBIT and EBITDA margins have increased to 19.57% and 23.25%, respectively, indicating efficient cost management and operational effectiveness.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.57, showing manageable leverage levels. Return on Equity (ROE) improved to 15.54%, highlighting effective use of equity. The equity ratio stands at 44.99%, providing a solid equity base. However, the increase in total debt from $1.191 billion to $1.306 billion requires monitoring.78
Positive
Cash Flow
Cash flow analysis shows a slight decrease in operating cash flow from $608 million in 2023 to $564 million in 2024, but free cash flow remains strong at $329 million. The free cash flow to net income ratio is 0.92, indicating efficient cash conversion. The decline in free cash flow from the previous year suggests a need to optimize capital expenditure management.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.13B | 2.88B | 2.52B | 2.55B | 2.34B |
| Gross Profit | 1.42B | 1.41B | 1.24B | 1.30B | 1.20B |
| EBITDA | 739.00M | 559.00M | 493.00M | 766.00M | 747.00M |
| Net Income | 359.00M | 190.00M | 188.00M | 421.00M | 431.00M |
Balance Sheet | |||||
| Total Assets | 5.13B | 4.68B | 4.47B | 4.37B | 4.13B |
| Cash, Cash Equivalents and Short-Term Investments | 213.00M | 229.00M | 270.00M | 426.00M | 323.00M |
| Total Debt | 1.31B | 1.19B | 1.28B | 846.00M | 932.00M |
| Total Liabilities | 2.81B | 2.47B | 2.32B | 1.91B | 1.99B |
| Stockholders Equity | 2.31B | 2.20B | 2.13B | 2.45B | 2.13B |
Cash Flow | |||||
| Free Cash Flow | 329.00M | 404.00M | 305.00M | 409.00M | 240.00M |
| Operating Cash Flow | 564.00M | 608.00M | 530.00M | 638.00M | 464.00M |
| Investing Cash Flow | -381.00M | -333.00M | -607.00M | -238.00M | -283.00M |
| Financing Cash Flow | -188.00M | -337.00M | -58.00M | -287.00M | -298.00M |
Hikma Pharmaceuticals Technical Analysis
Negative
43.40
Price Trends
48.19
Negative
51.33
Negative
51.12
Negative
Market Momentum
-1.48
Positive
25.92
Positive
9.42
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HKMPY, the sentiment is Negative. The current price of 43.4 is below the 20-day moving average (MA) of 45.18, below the 50-day MA of 48.19, and below the 200-day MA of 51.12, indicating a bearish trend. The MACD of -1.48 indicates Positive momentum. The RSI at 25.92 is Positive, neither overbought nor oversold. The STOCH value of 9.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HKMPY.
Hikma Pharmaceuticals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | 12.21B | 18.14 | 16.96% | 0.63% | 13.13% | -0.47% | |
71 Outperform | $4.78B | 13.03 | 15.47% | 3.83% | 7.03% | 31.08% | |
66 Neutral | 3.05B | 1,517.19 | -3.00% | ― | 9.81% | ― | |
58 Neutral | 20.88B | -133.26 | -30.46% | ― | 2.43% | 64.37% | |
54 Neutral | 11.32B | -3.34 | -3.40% | 4.94% | -7.47% | -438.39% | |
51 Neutral | 2.94B | -38.29 | -1.80% | 5.36% | -2.32% | 35.46% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
HKMPY
Hikma Pharmaceuticals
42.50
-6.18
-12.70%
RDY
Dr Reddy's Laboratories
14.16
-1.75
-11.00%
VTRS
Viatris
9.49
-1.59
-14.35%
PRGO
Perrigo Company
20.76
-3.80
-15.47%
TEVA
Teva Pharmaceutical
18.36
0.62
3.49%
AMRX
Amneal Pharmaceuticals
9.60
1.25
14.97%
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.