Headquartered in Dublin, Ireland, Endo International Plc (ENDP - Get Rating) is a specialty pharmaceutical company that manufactures and sells generic and branded pharmaceuticals in the United States and internationally. The company has a broad range of product portfolios and is making several advances across its segments to boost its operational performance.

However, the stock has dipped 70.5% in price over the past year and 28% over the past month. In addition, closing yesterday’s trading session at $2.47, the stock is currently trading below its 52-week high of $8.74, which it hit on March 15, 2021.

Furthermore, yesterday equity research analysts at Citigroup lowered their price targets from $11.00 to $6.00, and TheStreet downgraded the stock from a “c-“ rating to a “d” rating.

Click here to checkout our Healthcare Sector Report for 2022

Here is what could shape ENDP’s performance in the near term:

Poor Bottom Line Performance

ENDP’s revenue increased 3.8% year-over-year to $789.43 million for its fourth quarter, which ended Dec. 31, 2022. However, its loss from continuing operations surged significantly from its year-ago value to $547.56 million. Its net loss came in at $562.06 million, compared to 119.34 million in net income in the prior-year quarter. Its loss per share amounted to $2.41 over this period.

Discounted Valuations

In terms of forward non-GAAP P/E, the stock is currently trading at 1.20x, which is 94.1% lower than the 20.16x industry average. Also, its 2.87x forward EV/Sales multiple is 36.9% lower than the 4.41x industry average. Furthermore, ENDP’s 0.20x forward Price/Sales  is 96.2% lower than the 5.30x  industry average.

POWR Ratings Reflect Uncertainty

ENDP has an overall C rating, which equates to a Neutral in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. ENDP has a D grade for Momentum, which is justified given that the stock is currently trading below its 50-day and 200-day moving averages of $3.23 and $4.12, respectively, indicating a downtrend.

Of the 176 stocks in the F-rated Medical – Pharmaceuticals industry ENDP is ranked #55.

Beyond what I have stated above, one can view ENDP ratings for Growth, Stability, Quality, Value, and Sentiment here.

Bottom Line

ENDP’s stock has lost significant momentum due to the company’s poor financial performance and operational inefficiencies over the past few months. In addition, analysts expect its EPS to decline in fiscal 2022, which could cause its shares  to retreat further in the near term. Therefore, we think investors should wait before scooping up its shares.

How Does Endo International plc (ENDP) Stack Up Against its Peers?

While ENDP has an overall C rating, one might want to consider its industry peers, Novartis AG (NVS - Get Rating), Johnson & Johnson (JNJ - Get Rating), and Bristol-Myers Squibb Company (BMY - Get Rating) which have an overall A (Strong Buy) rating.

Click here to checkout our Healthcare Sector Report for 2022

ENDP shares were trading at $2.46 per share on Thursday morning, down $0.01 (-0.40%). Year-to-date, ENDP has declined -34.57%, versus a -10.99% rise in the benchmark S&P 500 index during the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...

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