Here's Why You Should Add PAHC Stock to Your Portfolio Right Now

Phibro Animal Health Corporation’s PAHC focus on advancing its Animal Health business drove growth in the fourth quarter of fiscal 2025. The company’s recovery within Mineral Nutrition and Performance Products is fueling growth. Additionally, a strong solvency position looks encouraging. Yet, dull macroeconomic conditions are a concern for Phibro’s operations.

In the past year, this Zacks Rank #1 (Strong Buy) company’s shares have rallied 101.1% compared with the industry’s 3% growth and the S&P 500 composite's 20.7% increase.

The renowned animal health and mineral nutrition company has a market capitalization of $1.60 billion. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 27.88%.

Let’s delve deeper.

Phibro’s Key Tailwinds

Animal Health Business Growth Continues: Phibro’s key animal health products, including MFAs (medicated feed additives) and nutritional specialty products, facilitate enhanced animal nutrition. Its nutritional offerings, such as OmniGen-AF and Animate, continue to gain traction in the global dairy industry, while its vaccine portfolio protects animals against both viral and bacterial diseases challenge.

The recently completed acquisition of the medicated feed additive and certain water-soluble product lines from Zoetis added more than 37 established product lines marketed across approximately 80 countries, along with six manufacturing sites in the United States, Italy, and China.

The company ended the fiscal fourth quarter with the Animal Health business reporting 53% sales growth year over year, driven by a robust 77% increase in MFA and other product sales, primarily reflecting incremental revenues from the recently acquired Zoetis portfolio and stronger international demand. Within the segment, nutritional specialty product net sales increased 11%, supported by higher sales of microbial and companion animal products. Vaccine net sales grew 21%, aided by continued poultry product growth in Latin America and increased international demand.

Recovery Within the Mineral Nutrition and Performance Product Businesses: In the past few quarters, Phirbo has been experiencing recovery within the Mineral Nutrition and Performance Products businesses. In the fourth quarter of fiscal 2025, Mineral Nutrition net sales were up 3%, primarily driven by increased demand for copper and trace minerals.

Mineral Nutrition gross profit increased $0.5 million, supported by higher average selling prices. Performance Products net sales were up 13% year over year, reflecting higher demand for ingredients used in personal care products. Performance Products gross profit increased $0.2 million, also benefiting from higher average selling prices.

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Stable Solvency Structure: At the end of fiscal 2025, Phibro’s total cash and short-term investments were $77 million. The company has good solvency, as reflected in its low short-term payable debt of $16 million on its balance sheet.

Phibro’s Key Headwinds

Macroeconomic Concerns: In the current scenario, Phibro’s business is severely affected by economic sanctions, bans and broader military conflicts resulting from the ongoing armed conflict between Russia and Ukraine. Other impacts include supply-chain and logistics disruptions, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy.

Consequently, these macroeconomic factors could reduce Phibro’s profitability and negatively impact its overall financial performance. In the fiscal fourth quarter, cost of goods sold increased $44.5% from the prior-year level, leading to a 287-basis-point contraction in gross margin to 29.1%. Selling, general and administrative expenses rose 11.1%. Persistent inflationary and foreign currency headwinds remain a concern.

Estimate Trend for Phibro

The Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) has moved 6.5% north to $2.45 in the past 30 days.

The consensus estimate for revenues is pegged at $1.46 billion, indicating a 12.9% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are GE HealthCare Technologies GEHC, Masimo MASI and Envista NVST.

GE HealthCare has an earnings yield of 5.8% compared with the industry’s 0.2%. Shares of the company have surged 76.5% compared with the industry’s 3.4% growth. GEHC’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 12.5%.

GEHC carries a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo, currently carrying a Zacks Rank #1, has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. MASI shares have rallied 18.9% against the industry’s 15.4% decline in the past year.

Envista, currently carrying a Zacks Rank #2(Buy), has an estimated earnings growth rate of 15.2% for fiscal 2026 compared with the S&P 500 composite’s 11.7% growth. Shares of the company have rallied 16% compared with the industry’s 3.4% growth. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.50%.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research