Performance in Q2 2018
In the second quarter, Endo International (ENDP) reported revenues of $715 million, which is a YoY (year-over-year) decline of 18.4%. While the company benefited from double-digit growth in sales of Xiaflex and sterile injectables, growth was partially offset by a loss of 180-day marketing exclusivity for its generic Zetia (ezetimibe) and a voluntary market recall of Opana ER due to FDA concerns about the misuse and abuse potential of the drug.
Additionally, the discontinuation of commercialization of certain generic pharmaceutical products in the US market, competitive pressures, and the divestitures of Grupo Farmacéutico Somar and Litha Healthcare Group had negative impacts on Q2 revenues.
The company also reported a GAAP gross margin of 46.6% in Q2 2018, which is a YoY increase of 820 basis points. It rose due to a favorable shift in the company’s product mix for higher margin business areas. Its adjusted gross margin and adjusted EBITDA margin also benefited from an increased focus on productivity gains and cost efficiencies.
To know more about the performance of Endo International stock after its Q2 2018 earnings release, be sure to read Why Endo International Stock Soared after Q2 Results.
Analyst recommendations for Endo International
Of the 18 analysts covering Endo International in August, two have recommended a “strong buy” for the stock, two have recommended a “buy,” and 13 have recommended a “hold.” One analyst has recommended a “sell.” Wall Street analysts have projected a 12-month consensus target price of $12.25, which would be a decline of 24.5% over the stock’s closing price on August 8.
Analyst recommendations for peers
Of the 22 analysts covering Jazz Pharmaceuticals (JAZZ) in August, 77.3% have recommended a “buy” for the stock. About 22.2% of the 18 analysts covering Mallinckrodt (MNK) have recommended a “buy,” and 65% of the 20 analysts tracking Mylan (MYL) have recommended a “buy.”
In the next part of this series, we’ll look at revenue growth prospects for Endo International for 2018.