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BCPC

Balchem NasdaqGS:BCPC Stock Report

Last Price

US$126.33

Market Cap

US$4.1b

7D

2.8%

1Y

-16.2%

Updated

05 Oct, 2022

Data

Company Financials +
BCPC fundamental analysis
Snowflake Score
Valuation1/6
Future Growth2/6
Past Performance4/6
Financial Health5/6
Dividends0/6

BCPC Stock Overview

Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition, and industrial markets in the United States and internationally.

Balchem Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Balchem
Historical stock prices
Current Share PriceUS$126.33
52 Week HighUS$174.29
52 Week LowUS$110.15
Beta0.59
1 Month Change-2.22%
3 Month Change-3.87%
1 Year Change-16.19%
3 Year Change29.81%
5 Year Change54.67%
Change since IPO79,844.06%

Recent News & Updates

Sep 20
Here's What To Make Of Balchem's (NASDAQ:BCPC) Decelerating Rates Of Return

Here's What To Make Of Balchem's (NASDAQ:BCPC) Decelerating Rates Of Return

What are the early trends we should look for to identify a stock that could multiply in value over the long term...

Sep 12

Balchem: Acquisitions And Cost Pressures Draw Attention

Summary The two acquisitions completed in 2022 should help to drive the revenue growth of Balchem's core Human Nutrition & Health business going forward. But BCPC is expected to register lower profitability in 2H 2022 as a result of higher expenses driven by inflation and debt used to finance the recent M&A deals. Balchem remains as a Hold-rated name, taking into account both its inorganic growth prospects and near-term cost pressures. Elevator Pitch Balchem Corporation's (NASDAQ:BCPC) stock is rated as a Hold based on my analysis. My prior August 2, 2021 article for BCPC focused on the company's record-breaking Q2 2021 financial results. This latest update for Balchem touches on its recent acquisitions and the inflationary cost environment, things that have drawn the attention of investors. I continue to assign a Hold investment rating to Balchem's stock. BCPC's forward P/E valuation is reasonably fair, which is reflective of the upside potential of the company's inorganic growth developments, and the downside risks relating to its short-term profitability. Recent M&As Will Boost Growth Of Core Human Nutrition Business On August 30, 2022, Balchem revealed that it had bought over Bergstrom Nutrition. In the announcement, BCPC describes Bergstrom Nutrition as a producer of MSM" or methylsulfonylmethane, which is a "nutritional ingredient" that boasts "benefits" in areas such as "joint health, sports nutrition, skin and beauty, healthy aging, and pet health." Bergstrom Nutrition is Balchem's second M&A transaction in the year. BCPC had disclosed earlier on Jun 21, 2022 that it concluded the takeover of Kappa Bioscience AS. Balchem called Kappa Bioscience "a leading science-based manufacturer of specialty vitamin K2" that supports "bone health, heart health, immunity, and athletic performance" in its announcement. It is noteworthy that both Bergstrom Nutrition and Kappa Bioscience will operate under Balchem's core business segment, Human Nutrition & Health. The Human Nutrition & Health business is BCPC's largest segment in terms of both top line and earnings contribution. According to Balchem's Q2 2022 earnings press release, the company derived 55% of its revenue in the first half of this year and 57% of its 1H 2022 profit before tax from the Human Nutrition & Health business segment. Human Nutrition & Health was also the fastest growing business for Balchem in the most recent quarter. BCPC's Human Nutrition & Health business' segment revenue grew by +18.1% YoY in Q2 2022, while its Animal Nutrition & Health and Specialty Products businesses segments delivered relatively more modest YoY top line expansion rates of +14.9% and +7.7%, respectively. As such, it makes sense that Balchem has decided to focus on M&A for its core Human Nutrition & Health segment to further boost the growth prospects of this business. Specifically, Kappa Bioscience is operating in a market of decent size with strong growth potential. At the company's most recent Q2 2022 results briefing on July 29, 2022, Balchem highlighted that the current size of the global K2 market is around $175 million and Kappa Bioscience has a 30% share of the worldwide K2 market. In comparison, the size of the global human choline (another key product for BCPC's Human Nutrition & Health business) market now is relatively smaller at $50 million. In its Q2 2022 earnings presentation slides, BCPC also mentioned that K2 is a fast-growing market that is expected to expand from $175 million now to as large as between $250 million and $300 million in 2025. As Kappa Bioscience is traditionally strong in Europe, there is room to increase the penetration rate of Kappa Bioscience's K2 products in the US (BCPC's home market) with the support of Balchem. Separately, Bergstrom Nutrition appears to be the outright leader in the MSM industry. On its corporate website, Bergstrom Nutrition emphasizes that it is the "leading manufacturer of MSM" globally, and notes that it was the company which "pioneered the use of MSM for animal and human health use." In a nutshell, it is reasonable to conclude that Balchem has done two very good acquisitions. More importantly, it is reassuring to know that BCPC is very selective when it comes to M&A targets and price discipline is a key component of its acquisition process. Balchem had stressed at its Q1 2022 investor call in late-April that it is "very disciplined in" the "evaluation of purchase price and risk", and it highlighted that "nothing (M&A deals) has closed over the last 2 years" despite the fact that it continues "participating and identifying the right targets." Higher Costs Expected Due To Inflation And Acquisition Debt In the preceding section, I discussed how Balchem's recent acquisitions could be supportive of the medium-to-long term top line growth for the company's Human Nutrition & Health segment. However, BCPC's profitability in the short term could possibly be affected by an increase in operating expenses and interest costs. As per the Wall Street's consensus financial estimates taken from S&P Capital IQ, Balchem's normalized net profit margin is expected to decrease from 15.1% for Q3 2021 and 14.6% for Q2 2022 to 14.2% in Q3 2022. The company's normalized net profit is projected to improve to 14.5% in Q4 2022, but this will be still lower than the 14.6% normalized net profit margin Balchem achieved for both Q1 2022 and Q2 2022. In my opinion, Balchem's actual profit margins in the second half of the year might be even lower than what the sell-side analysts are currently expecting.

Sep 05
Balchem (NASDAQ:BCPC) Seems To Use Debt Rather Sparingly

Balchem (NASDAQ:BCPC) Seems To Use Debt Rather Sparingly

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Aug 30

Balchem to acquire Cardinal Associates or Bergstrom Nutrition

Specialty ingredients company Balchem (NASDAQ:BCPC) is acquiring Cardinal Associates, operating as Bergstrom Nutrition. Bergstrom Nutrition is set to be included in Balchem's human nutrition and health business segment and integrated into the minerals and nutrients business unit upon closing. No other terms of the deal were disclosed. BCPC shares were trading -1.66% post-market. Source: Press Release

Shareholder Returns

BCPCUS ChemicalsUS Market
7D2.8%3.1%1.9%
1Y-16.2%-10.6%-18.8%

Return vs Industry: BCPC underperformed the US Chemicals industry which returned -10.1% over the past year.

Return vs Market: BCPC exceeded the US Market which returned -18.2% over the past year.

Price Volatility

Is BCPC's price volatile compared to industry and market?
BCPC volatility
BCPC Average Weekly Movement4.2%
Chemicals Industry Average Movement6.5%
Market Average Movement7.0%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.9%

Stable Share Price: BCPC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: BCPC's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19671,359Ted Harrishttps://www.balchem.com

Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition, and industrial markets in the United States and internationally. It operates through three segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. The Human Nutrition & Health segment supplies ingredients in the food and beverage industry.

Balchem Corporation Fundamentals Summary

How do Balchem's earnings and revenue compare to its market cap?
BCPC fundamental statistics
Market CapUS$4.06b
Earnings (TTM)US$108.67m
Revenue (TTM)US$876.56m

37.3x

P/E Ratio

4.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
BCPC income statement (TTM)
RevenueUS$876.56m
Cost of RevenueUS$608.18m
Gross ProfitUS$268.38m
Other ExpensesUS$159.71m
EarningsUS$108.67m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.38
Gross Margin30.62%
Net Profit Margin12.40%
Debt/Equity Ratio48.1%

How did BCPC perform over the long term?

See historical performance and comparison

Dividends

0.5%

Current Dividend Yield

19%

Payout Ratio