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Taro Pharmaceutical Industries Future Growth

Future criteria checks 0/6

We currently don't have sufficient analyst coverage to forecast growth and revenue for Taro Pharmaceutical Industries.

Key information

n/a

Earnings growth rate

n/a

EPS growth rate

Pharmaceuticals earnings growth	14.9%
Revenue growth rate	n/a
Future return on equity	n/a
Analyst coverage	None
Last updated	n/a

Recent future growth updates

Recent updates

Seeking Alpha • Dec 12

Taro Pharmaceutical Industries Ltd. Is An Overlooked Opportunity

Summary Taro Pharmaceutical Industries is a hidden treasure in the pharmaceutical industry, with a Strong Buy Quant Rating and positive financials. The company has been overshadowed by Teva Pharmaceutical Industries but has potential for growth in its niche. Taro's recent earnings report showed increased sales and profitability, making it an attractive investment opportunity. Read the full article on Seeking Alpha

Seeking Alpha • Aug 16

Taro Pharmaceutical: Sun Pharma Deal Uncertain, No Discernible Value Beyond NAV (Rating Downgrade)

Summary Taro Pharmaceutical's minority shareholders have resisted Sun Pharmaceuticals' offer of $38 per share, stating that Taro is worth more. Taro's operating economics are unattractive in my view, with declining pre-tax earnings and no revenue growth. Uncertainty remains on the Sun Pharma bid, placing uncertainty on price visibility. Revise to hold. Read the full article on Seeking Alpha

Seeking Alpha • Jun 02

Taro Pharmaceutical: Potential Value In Sun Pharma Offer

Summary Taro received a $38/share offer from Sun Pharma last month. The deal represents a decent premium to the firm's market value at the time and a 12% premium to my estimate of fair value. Further insights reveal the deal could be valuable to Taro shareholders given all the contributing factors. With the new catalyst in place, I am revising the position to buy, not discounting the potential for a competing bid either. Read the full article on Seeking Alpha

Seeking Alpha • Feb 24

Taro Pharmaceutical: Stagnating Growth At 1.6% Trailing Earnings Yield, Rate Hold

Summary Taro Pharmaceutical's quarterly numbers came in with very thin growth at the operating and bottom-lines given the impact from settlement charges. Price erosion in its U.S. generics business continues to be a headwind. Question is, does the stock represent value at these compressed multiples. We sought to understand the same, and found the data supports a neutral view. Investment Summary Israeli-based pharmaceutical companies are at the forefront of innovation and drug development globally. Not all opportunities are created equal, however. For those investors restricted to investing in U.S. exchanges, Taro Pharmaceutical Industries Ltd (TARO) has been an underwhelming performer versus key benchmarks over the last 6-years to date [Figure 1]. The company posted its Q3' results last month with flat top-line growth and a substantial decrease in earnings after it booked another round of non-operating losses in its cash flow statement and P&L. As a reminder, these charges fall on the back of charges filed by the Department of Justice ("DOJ") in 2020' for conspiring to "fix prices, allocate customers, and rig bids for generic drugs". The charges came after TARO admitted to participating in "two charged conspiracies between 2013 and 2015", combined with a "second conspiracy with a generic drug company based in Pennsylvania and other individuals, from at least as early as May 2013 and continuing until at least December 2015". The outcome was a part of a wider DOJ investigation where a total of 6 companies were charged with antitrust conspiracies related to drug pricing on sales into the U.S. As a result, TARO, along with its co-conspirator, agreed to pay a collective $426mm in penalties. Subsequently, its bottom-line has been materially impacted by the decision, leading to negligent post-tax earnings growth since FY20'. The question is, at 0.7x book value, does the company represent a potential value play, or are there too many headwinds in the picture? Here, we sought to extrapolate the latest data to gauge this. Alas, given the culmination of reasons presented in this report, the data supports that TARO stock is currently a hold. It has a large reversal ahead of itself in order to achieve a positive re-rating, meaning that investors are unlikely to be attracted to the stock until we see evidence of the same. Fig. (1) TARO price performance FY17–date Data: Updata TARO Q4 results analytics Turning to the latest set of numbers, its prudent to perform a rigorous examination of TARO's growth percentages to see how it fared with and without the settlement charges involved. Looking in greater detail, with respect to the P&L, we'd note the following data points as key takeaways: Quarterly net sales came in flat YoY to $139mm as the cost of sales increased 19.4% to $75mm. To this point, TARO noted it continues to "experience price pressures particularly in the U.S. generic business" alas the price erosion in its generics footprint continues to be a remarkable headwind to top-line growth. This reflects the points raised earlier that were raised in the DOJ investigations. We see further evidence of this as gross profit clamped ~15% YoY to $64mm, leading to an 8.7 percentage point compression in quarterly gross margin to 46%. In a high-inflation environment, this could be a meaningful risk to profitability and earnings growth down the line, should this trend continue. TARO pared back R&D expenditure as a result of the above to ~9.3% of turnover. It also lost leverage at the SG&A line with a $25mm YoY increase to ~$50mm in general expenditures. It's important to note that these expenditures include adjustments made for the company's Alchemee acquisition, a consumer products company, back in February FY22 on a $99mm valuation. As to the success of the acquisition, we've been unable to see an organic view of the company's performance given the settlement charges discussed here. Moving down the P&L, and the impact from its generics' price erosion listed above are abundantly clear. It recognized a $35.7mm headwind from downsides in its U.S. generics franchise, clipping just $1.3mm in quarterly income on a razor thin 0.94% operating margin. Looking at the 9-months to December FY22, the overall impact was a $33mm headwind, where the company booked $42mm in operating income. Again, talking in terms of margin growth, this is a substantial headwind that must be worked through. We don't believe a further sub-1% operating margin is sustainable for the company without a) eating through substantial cash, or b) at least having to pare back operations substantially. It pulled this down to earnings of $7.3mm, a 72.2% YoY decline that came to $0.19 in EPS. Again, scrutinizing the 9-month numbers, TARO clipped $18.5mm in net income, a 40% YoY pullback to $0.49 per share. The trailing earnings yield on this is just 1.6%, well below the S&P 500's trailing earnings yield of ~4.6%. This was further realized at the cash flow level, as it clipped a substantial wind-back in CFFO of $175mm or 87.5% YoY to $24.9mm with another $54mm burnt in on-balance sheet cash. Again, the cash flow yield on this is a paltry 2.17%. The firm is still well capitalized with a combined $1.2Bn in cash and short-term and long-term equivalents, however. Still, for investors searching for quality, growth, or even value, it's hard to see an alignment with any of these factors, and the obvious pullback in bottom-line fundamentals is further support of a neutral view. It is important to note these operating bottom-line results include the impact from its settlement and contingency charges listed earlier. Subsequently, it's important to make adjustments for the settlement payments. We refer investors to Figure 2 for the breakdown: Fig. (2) TARO reported numbers vs. settlement-adjusted [9-months to December 2022] Note: All figures are shown in $mm'. (Data: Author, adapted from TARO Q3 financial results)

Seeking Alpha • Jan 24

Taro Pharmaceutical GAAP EPS of $0.19 misses by $0.68, revenue of $139.2M misses by $23.92M

Taro Pharmaceutical press release (NYSE:TARO): Q3 GAAP EPS of $0.19 misses by $0.68. Revenue of $139.2M misses by $23.92M.

Seeking Alpha • Oct 28

Taro Pharmaceutical Non-GAAP EPS of $0.66 misses by $0.18, revenue of $130.5M misses by $30.52M

Taro Pharmaceutical press release (NYSE:TARO): FQ2 Non-GAAP EPS of $0.66 misses by $0.18. Revenue of $130.5M (-11.3% Y/Y) misses by $30.52M. Gross profit of $47.0M (36.0% of net sales) compared to $62.0M (47.0% of net sales). As of September 30, 2022, cash and cash equivalents, short-term bank deposits and marketable securities (both short- and long-term) decreased $58.9M to $1.2B from March 31, 2022.

Seeking Alpha • 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.

Seeking Alpha • 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.

Seeking Alpha • 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.

Analysis Article • Aug 03

We Think Taro Pharmaceutical Industries' (NYSE:TARO) Healthy Earnings Might Be Conservative

Taro Pharmaceutical Industries Ltd.'s ( NYSE:TARO ) solid earnings announcement recently didn't do much to the stock...

Analysis Article • Jan 26

A Look At Taro Pharmaceutical Industries' (NYSE:TARO) Share Price Returns

Taro Pharmaceutical Industries Ltd. ( NYSE:TARO ) shareholders should be happy to see the share price up 24% in the...

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Taro Pharmaceutical Industries has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Earnings and Revenue Growth Forecasts

NYSE:TARO - Analysts future estimates and past financials data (USD Millions)
Date	Revenue	Earnings	Free Cash Flow	Cash from Op	Avg. No. Analysts
3/31/2024	629	54	70	125	N/A
12/31/2023	611	46	88	143	N/A
9/30/2023	593	33	97	125	N/A
6/30/2023	575	21	75	98	N/A
3/31/2023	573	25	14	32	N/A
12/31/2022	570	46	2	16	N/A
9/30/2022	569	65	-198	-188	N/A
6/30/2022	571	91	-271	-261	N/A
3/31/2022	561	58	-171	-159	N/A
12/31/2021	566	1	-161	-149	N/A
9/30/2021	568	8	72	86	N/A
6/30/2021	578	29	10	26	N/A
3/31/2021	549	-387	29	46	N/A
12/31/2020	576	-303	22	44	N/A
9/30/2020	583	-268	76	100	N/A
6/30/2020	601	-257	228	253	N/A
3/31/2020	645	244	243	272	N/A
12/31/2019	650	248	252	281	N/A
9/30/2019	678	274	258	289	N/A
6/30/2019	677	281	291	324	N/A
3/31/2019	670	282	293	324	N/A
12/31/2018	665	310	331	363	N/A
9/30/2018	644	234	313	343	N/A
6/30/2018	655	224	304	333	N/A
3/31/2018	662	211	294	324	N/A
12/31/2017	683	208	N/A	343	N/A
9/30/2017	748	330	N/A	384	N/A
6/30/2017	807	401	N/A	454	N/A
3/31/2017	879	457	N/A	438	N/A
12/31/2016	948	489	N/A	476	N/A
9/30/2016	986	538	N/A	458	N/A
6/30/2016	969	547	N/A	383	N/A
3/31/2016	951	541	N/A	395	N/A
12/31/2015	930	579	N/A	454	N/A
9/30/2015	909	532	N/A	440	N/A
6/30/2015	948	542	N/A	439	N/A
3/31/2015	863	485	N/A	407	N/A
12/31/2014	806	422	N/A	277	N/A
9/30/2014	782	395	N/A	294	N/A
6/30/2014	736	348	N/A	329	N/A
3/31/2014	759	361	N/A	358	N/A
12/31/2013	737	321	N/A	349	N/A
9/30/2013	709	294	N/A	327	N/A
6/30/2013	665	263	N/A	294	N/A

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if TARO's forecast earnings growth is above the savings rate (2.4%).

Earnings vs Market: Insufficient data to determine if TARO's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if TARO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Insufficient data to determine if TARO's revenue is forecast to grow faster than the US market.

High Growth Revenue: Insufficient data to determine if TARO's revenue is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if TARO's Return on Equity is forecast to be high in 3 years time

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Company Analysis and Financial Data Status

Data	Last Updated (UTC time)
Company Analysis	2024/06/24 05:23
End of Day Share Price	2024/06/24 00:00
Earnings	2024/03/31
Annual Earnings	2024/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

Package	Data	Timeframe	Example US Source ^*
Company Financials	10 years	Income statement Cash flow statement Balance sheet	SEC Form 10-K SEC Form 10-Q
Analyst Consensus Estimates	+3 years	Forecast financials Analyst price targets	Analyst Research Reports Blue Matrix
Market Prices	30 years	Stock prices Dividends, Splits and Actions	ICE Market Data SEC Form S-1
Ownership	10 years	Top shareholders Insider trading	SEC Form 4 SEC Form 13D
Management	10 years	Leadership team Board of directors	SEC Form 10-K SEC Form DEF 14A
Key Developments	10 years	Company announcements	SEC Form 8-K

^* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Taro Pharmaceutical Industries Ltd. is covered by 3 analysts. 0 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

Analyst	Institution
Randall Stanicky	Goldman Sachs
Raghuram Selvaraju	H.C. Wainwright & Co.
Kenneth Cacciatore	TD Cowen

This company has been acquired

Taro Pharmaceutical Industries Future Growth

Future criteria checks 0/6

Key information

Recent future growth updates

Price target decreased to US$54.00

Consensus EPS estimates fall by 12%

Consensus forecasts updated

Price target decreased to US$75.00

Consensus EPS estimates fall by 25%

Recent updates

Sun Pharmaceutical Industries Limited (NSEI:SUNPHARMA) acquired remaining 21.5% stake in Taro Pharmaceutical Industries Ltd. (NYSE:TARO) from Krensavage Asset Management, LLC and others for approximately

Taro Pharmaceutical Shareholders Approve Merger with Sun Pharma and Taro Pharmaceutical Shares to Be De-Listed from the NYSE

Taro Pharmaceutical Industries Ltd. to Report Fiscal Year 2024 Results on May 20, 2024

Taro Pharmaceutical Industries Ltd. to Report Q3, 2024 Results on Jan 25, 2024

Taro Pharmaceutical Industries to Delist from NYSE

Sun Pharma Raises Offer to Buy Taro Pharmaceutical Industries' US Arm

Taro Pharmaceutical Industries Ltd. Is An Overlooked Opportunity

Taro Pharmaceutical Industries Ltd., Annual General Meeting, Dec 28, 2023

Taro Pharmaceutical Industries Ltd. to Report Q2, 2024 Results on Oct 26, 2023

Sun Pharmaceutical Industries Looking to Fully Acquire Its Israel-Based Unit Taro Pharmaceutical Industries

Taro Pharmaceutical: Sun Pharma Deal Uncertain, No Discernible Value Beyond NAV (Rating Downgrade)

Taro Pharmaceutical Industries Ltd. to Report Q1, 2024 Results on Jul 26, 2023

Taro Pharmaceutical Industries Ltd. Appoints Mr. Oded H. Sarig, Ph. D, to Serve as Director

Taro Pharmaceutical Industries Ltd. Announces Resignation of Dov Pekelman from the Board of Directors

Taro Pharmaceutical: Potential Value In Sun Pharma Offer

Taro Pharmaceutical Industries to be Delisted from NYSE

Full year 2023 earnings: EPS misses analyst expectations

Taro Pharmaceutical Industries Ltd. to Report Fiscal Year 2023 Results on May 23, 2023

Investor sentiment improves as stock rises 22%

Investor sentiment deteriorates as stock falls 16%

Taro Pharmaceutical: Stagnating Growth At 1.6% Trailing Earnings Yield, Rate Hold

Third quarter 2023 earnings: EPS and revenues miss analyst expectations

Taro Pharmaceutical GAAP EPS of $0.19 misses by $0.68, revenue of $139.2M misses by $23.92M

Taro Pharmaceutical Industries Ltd. to Report Q3, 2023 Results on Jan 24, 2023

Less than half of directors are independent

Second quarter 2023 earnings: EPS and revenues miss analyst expectations

Taro Pharmaceutical Non-GAAP EPS of $0.66 misses by $0.18, revenue of $130.5M misses by $30.52M

Price target decreased to US$54.00

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

Full year 2022 earnings: EPS misses analyst expectations

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

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

Consensus EPS estimates fall by 12%

Full year 2022 earnings: EPS misses analyst expectations

Less than half of directors are independent

Consensus forecasts updated

Third quarter 2022 earnings: EPS and revenues miss analyst expectations

Price target decreased to US$75.00

Consensus EPS estimates fall by 25%

Second quarter 2022 earnings released: EPS US$0.62 (vs US$1.18 in 2Q 2021)

VP, CFO & Chief Accounting Officer Daphne Huang has left the company

We Think Taro Pharmaceutical Industries' (NYSE:TARO) Healthy Earnings Might Be Conservative

First quarter 2022 earnings released: US$0.50 loss per share (vs US$11.37 loss in 1Q 2021)

Full year 2021 earnings released: US$10.12 loss per share (vs US$6.35 profit in FY 2020)

Full year 2021 earnings released: US$10.12 loss per share (vs US$6.35 profit in FY 2020)

New 90-day high: US$79.95

Third quarter 2021 earnings released: EPS US$0.86 (vs US$1.76 in 3Q 2020)

Revenue and earnings miss expectations

A Look At Taro Pharmaceutical Industries' (NYSE:TARO) Share Price Returns

New 90-day high: US$72.80

New 90-day high: US$72.47

New 90-day high: US$64.76

Revenue and earnings beat expectations

Second quarter 2021 earnings released: EPS US$1.18

New 90-day low: US$54.40