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TARO

Taro Pharmaceutical Industries NYSE:TARO Stock Report

Last Price

US$30.50

Market Cap

US$1.1b

7D

3.6%

1Y

-52.8%

Updated

28 Sep, 2022

Data

Company Financials +
TARO fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance3/6
Financial Health6/6
Dividends0/6

TARO Stock Overview

Taro Pharmaceutical Industries Ltd., a science-based pharmaceutical company, develops, manufactures, and markets prescription and over-the-counter pharmaceutical products in the United States, Canada, Israel, and internationally.

Taro Pharmaceutical Industries Ltd. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Taro Pharmaceutical Industries
Historical stock prices
Current Share PriceUS$30.50
52 Week HighUS$65.21
52 Week LowUS$28.56
Beta0.73
1 Month Change-11.85%
3 Month Change-15.65%
1 Year Change-52.84%
3 Year Change-59.05%
5 Year Change-72.99%
Change since IPO510.00%

Recent News & Updates

Aug 15

Taro Pharmaceutical hits 52-week low; down 28% YTD

Taro Pharmaceutical (NYSE:TARO) on Monday hit a 52-week low of $32.50. The Israeli drugmaker, known for marking generic and over-the-counter products, is down ~28% year to date. Taro (TARO) beat on the top and bottom lines in its Q2 2022 results at the end of July.

Jul 27

Taro Pharmaceutical Non-GAAP EPS of $1.09 beats by $0.24, revenue of $156.7M beats by $6.8M

Taro Pharmaceutical press release (NYSE:TARO): Q2 Non-GAAP EPS of $1.09 beats by $0.24. Revenue of $156.7M (+6.5% Y/Y) beats by $6.8M.

Jul 14

Taro Pharmaceutical: 10%+ Projected Earnings Yield Is A Strong Calling Card

Based on the current long-term trend, shares look like they will test long-term support. We expect support to hold there based on the company's strong earnings power and clean balance sheet. Adjusted cash flow numbers also remain strong. Investors may need to buy the fear here when the situation presents itself. If we pull up a long-term technical chart of Taro Pharmaceutical Industries Ltd. (TARO), we can see that shares remain above the stock's multi-year trend line which dates back all the way to 1998. This essentially means that shares remain in a long-term bull market despite the fact that shares have been making lower lows consistently for some time now. However, given the fact that we see no significant bullish divergences at present in either the RSI momentum indicator or indeed the MACD, the likelihood is that shares will test long-term support depicted below which may mean the $30 level approx may come into view here before a final long-term bottom is printed. Although long-term charts are not useful for trading purposes, what they do provide is insights into the underlying trend of the stock which simply cannot be ascertained from more short-term timeframes. Although short-term charts can be very much emotionally driven, multi-decade charts address far more information where rationality and psychology (Human states which generally do not change) are much more to the fore. Suffice it to say, our job is to decipher whether indeed Taro Pharmaceutical would be a strong buy at the $30 level. We can gain insights into this answer by monitoring the company's trends regarding its earnings and linking this to the company's valuation in general. Remember, Taro has no debt on its balance sheet which means interest expenses can not erode the company's net profit to any significant degree. Furthermore, the fact the shares are presently trading under book value permits us to focus on the company's earnings expectations and particularly what is expected in this present fiscal year (ends March 2023) Long-Term Chart Of Taro Pharmaceutical (Stockcharts.com) Being chartists, we believe Taro's share price action on the technical chart is a full reflection of the stock's known fundamentals such as but not limited to the recent DOJ investigations and subsequent cash payments, the recent Alchemee purchase, and the current competitive pressures which exist in this industry. In spite of these headwinds, the company reported a net profit of $58.3 million for its most recent fiscal year (which ended March 2022). However, it is the forward earnings multiple of 9.75 which has really caught our attention for the following reason. Cheap Earnings Earnings growth is the main driver of stock prices, period. Given that the above earnings multiple corresponds to projected earnings of $3.86 per share, Taro´s forward earnings yield comes in at (Projected Earnings/Stock Price - 3.86/37.62) 10.26%. This 10.26% projected yield equates to the investor´s rate of return if indeed management decided to pay out all of its earnings to shareholders. Taking into account however our $30 entry point, our projected annual yield would now increase to 12.87%. Now, given how Taro's U.S. market, in particular, may potentially not live up to expectations due to significant competitive pressures, that 12%+ forward earnings yield has to be taken with a grain of salt. We get this but even if we are wrong, there is still plenty of buffer between that projection and the prevailing inflation rate. Remember, with high single-digit inflation rates continuing to be the norm at present, investors will undoubtedly begin to price this new narrative into their positions. Suffice it to say, it is all about real returns going forward so double-digit nominal returns from certain equities are bound to come under extra scrutiny going forward from investors. Cash Flow When we look at the most recent year-end cash flow statement, we see that net cash of almost $159 million was actually used in the fiscal year. However, when we take out monies associated with loss contingencies and the settlement, we see that the adjusted operating cash flow number comes to a positive $165 million number. Although a forward cash-flow multiple can not be predicted at present due to the uncertainty regarding ongoing civil antitrust issues, the adjusted trailing operating cash-flow multiple for example comes in at 8.61.

Shareholder Returns

TAROUS PharmaceuticalsUS Market
7D3.6%3.7%-2.0%
1Y-52.8%5.3%-20.3%

Return vs Industry: TARO underperformed the US Pharmaceuticals industry which returned 4.2% over the past year.

Return vs Market: TARO underperformed the US Market which returned -22.1% over the past year.

Price Volatility

Is TARO's price volatile compared to industry and market?
TARO volatility
TARO Average Weekly Movement5.8%
Pharmaceuticals Industry Average Movement11.5%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: TARO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: TARO's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19501,455Uday Baldotahttps://www.taro.com

Taro Pharmaceutical Industries Ltd., a science-based pharmaceutical company, develops, manufactures, and markets prescription and over-the-counter pharmaceutical products in the United States, Canada, Israel, and internationally. The company also develops and manufactures active pharmaceutical ingredients primarily for use in its finished dosage form products. It offers its products for various therapeutic categories comprising allergy, analgesic, antibacterial, antibiotic, anticonvulsant, antiemetic, antifungal, anti-inflammatory, anti-cancer, antiplatelet agent, antipyretic, cardiovascular, CNS, corticosteroid, cosmetic, cough and cold, dermatology, diuretic, endocrine, gastrointestinal, laxative, narcotics, neuropathic pain, neuropsychiatric, sedative/hypnotic, and topical anti-neoplastic.

Taro Pharmaceutical Industries Ltd. Fundamentals Summary

How do Taro Pharmaceutical Industries's earnings and revenue compare to its market cap?
TARO fundamental statistics
Market CapUS$1.15b
Earnings (TTM)US$91.11m
Revenue (TTM)US$570.90m

12.6x

P/E Ratio

2.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TARO income statement (TTM)
RevenueUS$570.90m
Cost of RevenueUS$273.86m
Gross ProfitUS$297.04m
Other ExpensesUS$205.93m
EarningsUS$91.11m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.42
Gross Margin52.03%
Net Profit Margin15.96%
Debt/Equity Ratio0.0%

How did TARO perform over the long term?

See historical performance and comparison