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Hikma Pharmaceuticals
(OTC:HKMPY)
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Rating:62Neutral
Price Target:
$44.00
▲(4.71% Upside)
Action:Reiterated
Date:03/03/26
The score is driven primarily by mixed financial quality: improving earnings and margins are offset by deteriorating cash flow and higher leverage. Technicals are a notable drag given the strong downtrend and weak momentum signals. Valuation (low P/E and high dividend yield) and a generally constructive earnings-call outlook, despite near-term margin pressure, provide partial support.
Positive Factors
High group profitability
Sustained group EBITDA around 25% indicates a structurally advantaged cost base and pricing power across segments. This higher-margin profile supports reinvestment, capacity buildouts and buybacks over the medium term, improving resilience versus lower-margin peers.
Negative Factors
Weak cash conversion
Persistent weak cash conversion reduces financial flexibility: reported earnings are not fully translating into cash for debt paydown, reinvestment or dividends. Over 2–3 years this raises refinancing and execution risk if capital-intensive projects need cash while FCF remains depressed.
Read all positive and negative factors
Positive Factors
Negative Factors
High group profitability
Sustained group EBITDA around 25% indicates a structurally advantaged cost base and pricing power across segments. This higher-margin profile supports reinvestment, capacity buildouts and buybacks over the medium term, improving resilience versus lower-margin peers.
Read all positive factors
Hikma Pharmaceuticals (HKMPY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.35B
Dividend Yield4.04%
Average Volume (3M)576.00
Price to Earnings (P/E)0.2
Beta (1Y)0.45
Revenue Growth7.31%
EPS Growth12.55%
CountryUS
Employees9,500
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)3.64
Shares Outstanding106,110,140
10 Day Avg. Volume104
30 Day Avg. Volume576
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)1.78
Price to Sales (P/S)1.38
P/FCF Ratio28.48
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue1.63
Enterprise Value/Gross Profit3.91
Enterprise Value/Ebitda6.16
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Hikma Pharmaceuticals Business Overview & Revenue Model
Company Description
Hikma Pharmaceuticals PLC is a global pharmaceutical company that specializes in the development, production, commercialization, and distribution of a wide array of generic, branded, and in-licensed medicines. These pharmaceuticals are provided in...
How the Company Makes Money
Hikma makes money primarily by manufacturing and selling pharmaceutical products across three main business segments: (1) Injectables: revenue is generated from supplying generic injectable medicines (e.g., sterile injectables) to hospital and ins...
Hikma Pharmaceuticals Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call outlines a clear strategic reset with substantial near-term investment (R&D, sales/marketing, capacity) and reorganizational changes that are expected to depress some margins and delay certain revenue ramps through 2026. At the same time, the company presented multiple concrete positives: solid group EBITDA (25%), a recovered Rx division (~20% margins and strong EBIT history), meaningful branded and MENA growth, an expanding RTU pipeline with encouraging early traction (TYZAVAN), a plan to materially grow CMO over the medium term, and a GBP 250m buyback. Management expresses confidence in returning injectables to stronger growth by 2027–2028 once investments and capacity projects (e.g., Bedford) come online. Overall, strategic actions and long-term prospects appear to outweigh near-term operational headwinds.Positive Updates
Strong overall profitability
Group EBITDA margin at ~25%, ahead of many competitors targeting ~22%, indicating robust overall profitability and cost structure.
Negative Updates
Injectables margin and near-term weakness
Injectables margins have reset materially — described as moving from mid-30s historically to high-20s now, with a cited near-term 2–3 percentage-point headwind driven by higher R&D, sales & marketing and CMO dynamics; management expects recovery only from 2027/2028.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong overall profitability
Group EBITDA margin at ~25%, ahead of many competitors targeting ~22%, indicating robust overall profitability and cost structure.
Read all positive updates
Company Guidance
Management reiterated confidence in FY26 guidance while warning of near‑term investment‑led margin pressure: group EBITDA is c.25% (versus peers targeting ~22%), R&D is being centralized and ramped to c.5–6% of sales (management cited ~$45m y/y uplift in R&D and ~GBP15m extra injectables R&D), injectables margins have been reset from mid‑30s to the high‑20s (the prior 30% “floor” was removed), and injectables are expected to bottom in 2026 with recovery from 2027 and stronger CMO and RTU-driven growth from 2028 (Bedford/Xellia capacity planned online in 2028); pipeline metrics highlighted TYZAVAN and ~15 RTU products, vancomycin market ~41m grams (13% converted already), Europe injectables grew ~23% this year, Rx is delivering ~20% margins with CMO today ~10% of revenue (targeting ~20% by 2030), branded MENA growth is being guided at ~7–8% with six new biosimilars signed, the group still views an aspirational GBP5bn revenue target for 2030 as achievable, and the board has approved a GBP250m share buyback this year.Hikma Pharmaceuticals Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
67
Positive
Cash Flow
52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.36B | 3.13B | 2.88B | 2.52B | 2.55B |
| Gross Profit | 1.44B | 1.42B | 1.41B | 1.24B | 1.30B |
| EBITDA | 781.82M | 727.00M | 559.00M | 688.00M | 766.00M |
| Net Income | 402.94M | 359.00M | 190.00M | 188.00M | 421.00M |
Balance Sheet | |||||
| Total Assets | 5.67B | 5.13B | 4.68B | 4.47B | 4.37B |
| Cash, Cash Equivalents and Short-Term Investments | 354.00M | 213.00M | 229.00M | 292.00M | 450.00M |
| Total Debt | 1.60B | 1.31B | 1.19B | 1.28B | 846.00M |
| Total Liabilities | 3.06B | 2.81B | 2.47B | 2.32B | 1.91B |
| Stockholders Equity | 2.59B | 2.31B | 2.20B | 2.13B | 2.45B |
Cash Flow | |||||
| Free Cash Flow | 162.38M | 329.00M | 404.00M | 305.00M | 409.00M |
| Operating Cash Flow | 359.84M | 564.00M | 608.00M | 530.00M | 638.00M |
| Investing Cash Flow | -394.92M | -381.00M | -333.00M | -607.00M | -238.00M |
| Financing Cash Flow | 58.14M | -188.00M | -337.00M | -58.00M | -287.00M |
Hikma Pharmaceuticals Technical Analysis
Positive
42.02
Price Trends
38.99
Positive
37.42
Positive
39.87
Positive
Market Momentum
0.58
Negative
67.90
Neutral
88.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HKMPY, the sentiment is Positive. The current price of 42.02 is above the 20-day moving average (MA) of 39.76, above the 50-day MA of 38.99, and above the 200-day MA of 39.87, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 67.90 is Neutral, neither overbought nor oversold. The STOCH value of 88.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HKMPY.
Hikma Pharmaceuticals Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $12.01B | 26.17 | 11.76% | 0.64% | -1.06% | -26.71% | |
62 Neutral | $4.35B | 0.19 | 15.83% | 4.04% | 7.31% | 12.55% | |
61 Neutral | $40.35B | 25.11 | 20.79% | ― | 5.76% | ― | |
59 Neutral | $5.48B | 45.26 | -144.72% | ― | 7.62% | ― | |
57 Neutral | $19.60B | -63.28 | -1.97% | 3.99% | 2.14% | 91.93% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $1.52B | -0.84 | -50.65% | 8.48% | -3.62% | -932.84% |
* Healthcare Sector Average
HKMPY
Hikma Pharmaceuticals
41.57
-10.35
-19.93%
RDY
Dr Reddy's Laboratories
14.38
-0.63
-4.17%
VTRS
Viatris
16.70
7.73
86.26%
PRGO
Perrigo Company
11.02
-14.04
-56.02%
TEVA
Teva Pharmaceutical
34.64
17.63
103.64%
AMRX
Amneal Pharmaceuticals
17.15
8.73
103.68%
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.