Is Amneal Pharmaceuticals, Inc. (AMRX) the Best Pharma Stock to Buy for Long Term Growth?

We recently published a list of 10 Best Pharma Stocks to Buy for Long Term Growth. In this article, we are going to take a look at where Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) stands against other best pharma stocks to buy for long term growth.

U.S. Pharma Turns to China for Drug Deals

With big American pharmaceutical corporations always searching for medications in China, the US pharmaceutical industry is going through a unique trend never seen before. About 30% of Big Pharma acquisitions involving at least $50 million upfront in 2024 involved Chinese corporations, according to DealForma statistics, as reported by CNBC. This was an increase from 20% the previous year and nearly 0% just five years before.

Experts cite several causes for this tendency. Some people think that Chinese pharmaceutical firms are drawing notice due to their sophisticated development skills, which enable them to produce potent compounds in large quantities. In addition to being able to start testing on human subjects more quickly, these Chinese companies can charge a lower price for these medications than the US. Buyers have developed a business strategy that enables them to import medicines through licensing agreements, according to CNBC. The dearth of venture capital in China is additional pressure on biotech companies to enter these agreements.

Experts think this situation is here to stay, even though there are several possible causes for this tendency. Although the US pharmaceutical industry is expected to be impacted, it is uncertain how these effects would manifest. If big pharmaceutical companies find a good Chinese drug at a low price, some experts think it may destroy American startups; others think the competition would benefit the sector. Tim Opler, a managing director in Stifel’s global healthcare group, stated the following regarding the circumstances:

“It’s kind of a watershed moment where the pharma industry is like, ‘We don’t really need to buy U.S. biotechs necessarily. We will if it makes sense, but we can buy perfectly good biotech assets through licensing deals with Chinese companies.”

Emily Field, Head of European Pharma Research at Barclays, spoke to CNBC on February 20 about the performance of obesity medications, the effects of US tariffs, and the dynamics of the pharmaceutical industry. According to her, at least in the first half of this year, the industry might not perform poorly. The effectiveness of obesity medications is still up for debate, though, as leading companies in the field have shown inconsistent results in the past.

Speaking about the tariffs, she stated that since some businesses assemble their products in the US after producing them overseas, their implementation raises several unanswered questions for the pharmaceutical industry. These businesses, therefore, have relatively low manufacturing costs, which is an important factor to take into account when assessing the effects of tariffs. She thought that these businesses could easily absorb the higher expense of the tariffs. The topic hasn’t come up much on earnings calls this quarter, and the market is nearing the end of the reporting season.

Our Methodology

For this article, we screened for companies that operate in the pharmaceutical industry. From that list, we identified stocks that have achieved positive revenue growth over the past five years. Then, we picked companies with a 5-year revenue growth of 10% and ranked the top 10 based on hedge fund sentiment as of Q4 2024, as per Insider Monkey’s database.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX)

Number of Hedge Fund Holders: 26 

Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) was founded in 2002 and is based in Bridgewater, New Jersey. The company has operations in the U.S., India, and Ireland. It develops and distributes a wide range of generic and specialty pharmaceutical products, focusing on complex generics, injectables, biosimilars, and treatments for CNS and endocrine disorders. The company’s product offerings include oral solids, injectables, nasal sprays, and transdermal patches, sold to wholesalers, pharmacies, hospitals, and government agencies through its AvKARE segment.

Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) delivered strong financial results for Q4 and full-year 2024, with revenue reaching $731 million in Q4—an 18% year-over-year increase—and $2.8 billion for the year, up 17% from 2023. This growth was fueled by solid performance across all segments, including Affordable Medicines, Specialty, AvKARE, and Biosimilars. Adjusted EBITDA also rose to $155 million for Q4 and $627 million for the year, which reflected a 12% increase, driven by improved operational efficiency and cost control.

Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) made significant progress in deleveraging, reducing its net leverage from 4.8x to 3.9x. Segment-wise, Affordable Medicines generated $1.7 billion in revenue, a 15% annual increase, while Specialty revenues grew 14%, boosted by successful product launches like CREXONT. AVKARE saw a 25% revenue increase in 2024, and biosimilar revenue surged by 49% year-over-year in Q4. Its operating cash flow totaled $348 million for the year (excluding one-time legal costs), and the company achieved an adjusted gross margin of 42.4%.

Looking ahead to 2025, Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) projects revenue between $3.0 to $3.1 billion and an adjusted EBITDA of $650 to $675 million, representing continued growth. The adjusted EPS forecast is $0.65 to $0.70, signaling investor confidence in its trajectory.

Investors remain bullish on the stock due to its strong product pipeline and strategic initiatives. The launch of CREXONT has already captured 1% of the market within four months and is expected to exceed 3% by year-end. Among the best pharmaceutical stocks, the business’s entry into the fast-growing weight loss and obesity market—through a collaboration with Metsera—positions the company for long-term growth. By targeting the booming GLP-1 receptor agonist market, the company aims to launch GLP-1 peptides globally, including in the U.S., by 2028, expanding its footprint and diversifying its portfolio.

Overall, AMRX ranks 9th on our list of best pharma stocks to buy for long term growth. While we acknowledge the potential of pharmaceutical companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMRX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.