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On Friday, Piper Sandler adjusted its price target for Amphastar Pharmaceuticals (NASDAQ:AMPH) shares, lowering it to $32.00 from the previous $36.00, while reaffirming a Neutral rating on the stock. Currently trading at $27.91, InvestingPro analysis suggests the stock is undervalued, despite three analysts recently revising their earnings expectations downward. The revision follows an assessment of the company’s revenue outlook and product pipeline.
Amphastar’s management had previously indicated that the company’s revenue trajectory for 2025 is expected to be flat compared to 2024, following a robust 13.6% revenue growth in the last twelve months. The company maintains a healthy gross profit margin of 51.1%, though this forecast is partly due to diminishing margins on certain generic products, notably injectable glucagon and epinephrine. Piper Sandler’s analysis, detailed in a note from February 27, 2025, also took into account the potential impact of two new generic product launches anticipated in the fourth quarter of 2025. However, the firm noted that these contributions are risk-adjusted and not guaranteed.
The firm acknowledges that Amphastar may have several new generic approvals on the horizon that could positively affect its financials. Nevertheless, the most significant opportunity for revenue and EBITDA growth lies with AMP-002, a potential first-to-market generic injectable product. The visibility on regulatory approval for AMP-002 is low, with Amphastar indicating the possibility of an FDA decision arriving in late 2025 or the first quarter of 2026.
Amphastar’s future performance hinges on various factors, including the successful launch of new generics, the outcome for AMP-002, and the ability to withstand pricing pressures on existing products. Piper Sandler’s revised price target reflects these considerations, as well as the inherent risks associated with the pharmaceutical industry’s regulatory environment.
Investors and stakeholders in Amphastar Pharmaceuticals will be closely monitoring the company’s progress, especially regarding regulatory updates and the potential market entry of AMP-002. The company’s share price will likely continue to be influenced by these developments and the broader market conditions affecting the generic pharmaceutical sector. With an impressive Financial Health Score of 3.4 (rated as GREAT) according to InvestingPro, which offers comprehensive analysis and additional insights through its detailed Pro Research Report, investors can access deeper analysis of Amphastar’s potential among 1,400+ top US stocks.
In other recent news, Amphastar Pharmaceuticals announced its fourth-quarter 2024 earnings, which did not meet analyst expectations. The company reported an earnings per share (EPS) of $0.92, falling short of the forecasted $0.97, and revenue of $186.5 million, which was below the anticipated $192.69 million. Additionally, Amphastar’s gross margins decreased to 46.5% from 54% year-over-year. Despite these challenges, the company achieved a 5% year-over-year growth in quarterly revenue and a 14% increase in annual revenue to $732 million.
Looking ahead, Amphastar expects flat sales in 2025 but aims for a return to growth in 2026, focusing on new product launches and expansion of its manufacturing capacity. The company has also formed a strategic partnership with MannKind (NASDAQ:MNKD) to promote Baximi, expanding its sales reach. Analyst discussions during the earnings call highlighted the potential approval of four key products in 2025, with ongoing discussions with the FDA regarding regulatory approvals. Amphastar is also planning significant investments in R&D and manufacturing to support future growth.
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