Phibro Animal Health PAHC shares have climbed 87.5% in the past year, showcasing impressive momentum. This has outpaced the industry’s 10.4% growth and the S&P 500 Composite’s 13.8% gain.

Sporting a Zacks Rank #1 (Strong Buy) at present, the renowned animal health and mineral nutrition company is gaining from the strength of its diversified portfolio across all three segments. The prospering Vaccine business and strong potential in the extensive overseas market instill optimism in the stock. 

Headquartered in New Jersey, Phibro offers a broad range of products for food animals, including poultry, swine, beef, dairy cattle and aquaculture. In addition to animal health and mineral nutrition products, the company manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries. Phibro’s business is currently concentrated in the livestock sector, and it is investing resources to develop products for the companion animal sector.

Key Factors Behind PAHC’s Surge

The rally in the company’s share price can be linked to the robust demand for the company’s animal health products. Phibro is helping meet the growing demand for cost-effective, safe, high-quality animal protein amid the scarcity of natural resources. In the second quarter of fiscal 2025, the Animal Health segment delivered 32.5% sales growth year over year, driven by a strong 47% increase in MFA and other product sales from higher domestic and international demand. Moreover, Phibro’s latest acquisition of Zoetis’ medicated feed additive (MFA) product portfolio and certain water-soluble products adds more than 37 product lines sold across 80 countries, along with six manufacturing sites in the United States, Italy and China. 

Image Source: Zacks Investment Research

The division’s Vaccine business drove robust 12% growth, driven by poultry product introductions in Latin America as well as increased demand in both domestic and international regions. Phibro continues to strengthen its vaccine portfolio with innovations, incremental registrations and expanded production capacity.  Recently, the company began operations at a new vaccine production facility in Guarulhos, Brazil, that manufactures and markets autogenous vaccines against animal diseases for swine, poultry and aquaculture. Additionally, it launched new commercial vaccines and looks forward to bringing additional vaccines to the Americas.

Moreover, Phibro’s existing operations and sales, marketing and distribution network in more than 80 countries provide it with ample scope to take advantage of global growth opportunities. Outside the United States, the company’s global footprint spans key high-growth regions such as Brazil, China, India, Turkey, Australia, Canada and other countries in Africa. International sales accounted for approximately 40.4% of its total revenues in the fiscal second quarter. Investors are also upbeat about the performance of Phibro’s Mineral Nutrition business, which increased 3% due to higher sales volume and price. Meanwhile, strong demand for ingredients used in personal care products is driving the Performance Products segment’s growth.

Concerns for PAHC

Phibro’s business remains vulnerable to macroeconomic volatility, such as the conflict between Russia and Ukraine, supply-chain and logistics disruptions and heightened cybersecurity threats. The strengthening of the U.S. dollar is currently affecting the company’s export market.

A Glance at PAHC’s Estimates

The Zacks Consensus Estimate for Phibro’s fiscal 2025 and 2026 earnings per share (EPS) is expected to increase 62.2% and 8.7% year over year, respectively, to $1.93 and $2.10. In the past 30 days, the Zacks Consensus Estimate for the company's fiscal 2025 EPS has risen 19.1%.  

Revenues for fiscal 2025 are projected to grow 25.9% to $1.28 billion, while the same for fiscal 2026 is expected to reach $1.38 billion, implying a 7.7% increase.

Other Top MedTech Stocks

Some other top-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Cardinal Health CAH.

Masimo has an earnings yield of 2.5%, well ahead of the industry’s -3.6% yield. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 14.4%. Its shares have surged 35.5% against the industry’s 5.2% decline in the past year.

MASI sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Scientific, carrying a Zacks Rank #2 (Buy), has an earnings yield of 2.7% compared with the industry’s 1.4%. Shares of the company have rallied 49.9% compared with the industry’s 10.4% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.4%. Shares of the company have rallied 9.6% against the industry’s 2.8% fall. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 9.6%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Boston Scientific Corporation (BSX) : Free Stock Analysis Report

Cardinal Health, Inc. (CAH) : Free Stock Analysis Report

Masimo Corporation (MASI) : Free Stock Analysis Report

Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research