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Otsuka Holdings Co Ltd (OTSKY)
OTHER OTC:OTSKY
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Otsuka Holdings Co
(OTC:OTSKY)
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Rating:73Outperform
Price Target:
$33.00
▲(11.15% Upside)
Otsuka Holdings Co's stock is supported by strong technical indicators and a solid valuation, which are the most significant factors contributing to the score. While the financial performance shows profitability and stability, concerns about revenue decline and cash flow growth slightly temper the overall score.
Positive Factors
Innovative Product Pipeline
The NDA submission for zipalertinib indicates a strong pipeline in oncology, enhancing Otsuka's competitive position and potential revenue growth.
Strong Profitability
High profit margins demonstrate efficient operations and strong pricing power, supporting long-term financial health and shareholder returns.
Robust Balance Sheet
A low debt-to-equity ratio indicates financial stability, providing flexibility for strategic investments and resilience in economic downturns.
Negative Factors
Revenue Decline
A sharp revenue decline can impact future profitability and market position, posing a challenge to maintaining growth momentum.
Decreasing Free Cash Flow
Reduced free cash flow growth may limit the company's ability to invest in new projects and return capital to shareholders, affecting long-term growth.
Cash Flow Concerns
A lower operating cash flow to net income ratio suggests potential cash generation issues, which could hinder operational flexibility.
Otsuka Holdings Co (OTSKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.44B
Dividend Yield1.48%
Average Volume (3M)4.89K
Price to Earnings (P/E)10.6
Beta (1Y)0.17
Revenue Growth7.51%
EPS Growth203.70%
CountryUS
Employees35,338
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)0.76
Shares Outstanding1,085,977,800
10 Day Avg. Volume2,307
30 Day Avg. Volume4,892
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.69
Price to Sales (P/S)1.99
P/FCF Ratio20.55
Enterprise Value/Market Cap146.50
Enterprise Value/Revenue1.90
Enterprise Value/Gross Profit2.64
Enterprise Value/Ebitda8.26
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
Otsuka Holdings Co Business Overview & Revenue Model
Company DescriptionOtsuka Holdings Co., Ltd. engages in pharmaceuticals, nutraceuticals, consumer products, and other businesses worldwide. The company develops pharmaceutical products in the fields of oncology, cardiovascular system, renal system, digestive system, ophthalmology, diagnostics, and intravenous solutions, as well as medical devices businesses. It also provides EQUELLE, a product for women's health and beauty; BODYMAINTÉ Jelly, a conditioning food product; BODYMAINTÉ Drink, a drinkable-liquid; POCARI SWEAT, a drink; Calorie Mate, a nutritional food; OS-1, an oral rehydration solution; HINEX-R, a concentrated liquid diet; and Oronine H Ointment, a household antiseptic medicine. In addition, the company offers soft drinks, food products, and wines; chemicals; clinical testing and medical equipment; cosmetics; warehousing and transport services; analysis and measurement equipment; pharmaceutical intermediates; vehicle headlight testers; synthetic resin molded products; paper products; artificial turf; ceramic boards, ceramic walls, reliefs, terracotta, OT ceramics, and ceramic portraits and sign boards; functional films; stable isotopes; software and services to enhance management of mental healthcare systems; potassium titanate; polyolefin foams; spring and mineral water; industrial chemicals; hydrazine; insecticide and toiletry products; and adhesive tapes. Further, it operates a hotel. Otsuka Holdings Co., Ltd. was founded in 1921 and is based in Tokyo, Japan.
How the Company Makes MoneyOtsuka Holdings generates revenue primarily through the sale of pharmaceutical products, which account for a significant portion of its income. The company markets a range of prescription drugs, with a strong focus on areas such as psychiatry, neurology, and oncology. Key revenue streams include the commercialization of patented drugs and ongoing sales of established products. Additionally, Otsuka diversifies its income through its nutraceutical segment, which includes health supplements and functional beverages. The company often engages in strategic partnerships and collaborations with other pharmaceutical firms, research institutions, and healthcare organizations to enhance its product offerings and expand market reach. This collaborative approach contributes to its earnings by enabling access to new technologies and markets, as well as sharing research and development costs.
Otsuka Holdings Co Earnings Call Summary
Earnings Call Date:Aug 01, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:Feb 13, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong overall performance in both pharmaceutical and nutraceutical segments with significant revenue and profit growth, and positive strategic expansions such as the acquisition for drug discovery. However, there were challenges such as impairment losses and increased SG&A expenses.Q2-2024 Updates
Positive Updates
Significant Revenue and Profit Growth
Revenue increased by 17.0% to JPY 1,108.9 billion, and business profit grew by 37.8% to JPY 213.6 billion year-on-year, highlighting strong performance in pharmaceutical and nutraceutical segments.
Nutraceutical Business Expansion
The Nutraceutical business achieved over 20% growth, with revenue increasing in all three categories, notably For Women's Health at 56.9% and For Healthier Life at 25.5%.
Pharmaceutical Business Growth
Revenue in the pharmaceutical business increased by 17.9% year-on-year to JPY 766.7 billion, with significant contributions from products like REXULTI and LONSURF.
Upward Revision of Financial Forecast
The full-year revenue forecast was revised up by JPY 175 billion to JPY 2,315 billion, and business profit was revised up by JPY 60 billion to JPY 390 billion.
Acquisition for Drug Discovery
Announcement of the acquisition of a company in Boston for drug discovery technology, indicating strategic expansion.
Negative Updates
Impairment Loss Impact
Operating profit was impacted by an impairment loss on AVP-786, which led to strategic discontinuation of its development.
Decrease in Milestone Revenue
Upfront milestone and royalty revenue decreased to JPY 41.8 billion due to lower sales milestone income compared to the previous year.
Increase in SG&A Expenses
SG&A expenses increased due to higher promotion expenses, impacting overall cost management.
Company Guidance
During the Q2 2024 earnings call for 4578.T, significant financial growth was highlighted, with revenue increasing by 17.0% to JPY 1,108.9 billion and business profit rising by 37.8% to JPY 213.6 billion year-on-year, driven by strong performance in pharmaceutical and nutraceutical segments. Despite an impairment loss on AVP-786 affecting operating profit, net profit climbed by 5.1% due to finance income. The pharmaceutical business saw revenue increase by 17.9% to JPY 766.7 billion, bolstered by products like ABILIFY MAINTENA and JYNARQUE, while LONSURF achieved significant gains through colorectal cancer treatment guidelines endorsements. Nutraceuticals experienced over 20% growth, with revenue reaching JPY 271.8 billion, fueled by a 56.9% rise in the For Women's Health category. The company revised its full-year forecast, raising revenue expectations by JPY 175 billion to JPY 2,315 billion and business profit projections by JPY 60 billion to JPY 390 billion, aiming to maintain momentum through strategic investments and addressing social issues.Otsuka Holdings Co Financial Statement Overview
Summary
Otsuka Holdings Co shows strong profitability with high margins and a robust balance sheet with low leverage. However, a significant revenue decline and decrease in free cash flow growth are concerns that impact the overall financial performance score.Income Statement
Otsuka Holdings Co shows strong profitability with a high gross profit margin of 71.72% and a net profit margin of 18.57% for TTM (Trailing-Twelve-Months). However, the company experienced a significant revenue decline of 25.68% in the latest period, which is a concern. The EBIT and EBITDA margins are healthy, indicating efficient operations, but the revenue contraction impacts the overall score.65
Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio of 0.076, indicating low leverage and financial stability. The return on equity is strong at 16.39%, reflecting effective use of equity to generate profits. The equity ratio is solid, suggesting a strong capital structure. Overall, the balance sheet reflects financial health and stability.75
Positive
Cash Flow
The cash flow statement shows a decline in free cash flow growth by 37.73% in the latest period, which is a concern. However, the operating cash flow to net income ratio is reasonable at 0.56, and the free cash flow to net income ratio is healthy at 0.77. Despite the decline in free cash flow, the company maintains a decent cash flow position relative to its net income.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.43T | 2.33T | 2.02T | 1.74T | 1.50T | 1.42T |
| Gross Profit | 1.74T | 1.67T | 1.41T | 1.17T | 1.00T | 983.08B |
| EBITDA | 557.95B | 452.62B | 246.96B | 279.83B | 231.43B | 291.03B |
| Net Income | 451.27B | 343.12B | 121.62B | 133.91B | 125.46B | 148.14B |
Balance Sheet | ||||||
| Total Assets | 4.02T | 3.74T | 3.36T | 3.10T | 2.82T | 2.63T |
| Cash, Cash Equivalents and Short-Term Investments | 500.00B | 458.08B | 529.40B | 489.12B | 430.76B | 401.77B |
| Total Debt | 221.92B | 189.38B | 214.19B | 194.16B | 212.45B | 226.08B |
| Total Liabilities | 1.05T | 961.09B | 924.93B | 840.17B | 775.73B | 744.38B |
| Stockholders Equity | 2.90T | 2.73T | 2.39T | 2.23T | 2.01T | 1.85T |
Cash Flow | ||||||
| Free Cash Flow | 302.65B | 225.28B | 168.56B | 104.06B | 115.71B | 134.96B |
| Operating Cash Flow | 395.03B | 354.64B | 283.23B | 211.85B | 228.86B | 232.84B |
| Investing Cash Flow | -38.41B | -265.79B | -190.54B | -81.58B | -95.29B | -99.86B |
| Financing Cash Flow | -288.16B | -189.37B | -60.26B | -95.47B | -95.84B | -104.93B |
Otsuka Holdings Co Technical Analysis
Positive
29.69
Price Trends
28.90
Positive
28.11
Positive
26.37
Positive
Market Momentum
0.30
Negative
57.94
Neutral
63.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTSKY, the sentiment is Positive. The current price of 29.69 is above the 20-day moving average (MA) of 29.08, above the 50-day MA of 28.90, and above the 200-day MA of 26.37, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 57.94 is Neutral, neither overbought nor oversold. The STOCH value of 63.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTSKY.
Otsuka Holdings Co Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $176.11B | 21.99 | 40.53% | 2.52% | 2.76% | 6407.19% | |
77 Outperform | $103.65B | 14.52 | 35.61% | 3.41% | 5.97% | 128.66% | |
74 Outperform | $26.39B | 16.41 | 9.31% | ― | 5.00% | -1.03% | |
73 Outperform | $31.44B | 10.62 | 15.51% | 1.48% | 7.51% | 203.70% | |
73 Outperform | $112.07B | 18.59 | 33.84% | 4.84% | 1.26% | ― | |
69 Neutral | $113.91B | 13.02 | 6.76% | 4.58% | -9.32% | 120.62% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
OTSKY
Otsuka Holdings Co
29.95
4.09
15.81%
BIIB
Biogen
179.89
37.55
26.38%
BMY
Bristol-Myers Squibb
55.05
-2.02
-3.54%
GILD
Gilead Sciences
141.95
46.25
48.33%
GSK
GlaxoSmithKline
51.60
18.13
54.15%
SNY
Sanofi
47.04
-4.66
-9.02%
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.