Assertio Holdings, Inc. (ASRT), a commercial pharmaceutical company, offers neurology, hospital, and pain and inflammatory medications. The company’s shares have gained 205.8% over the past year and 66.9% year-to-date to close its last trading session at $3.64.
In terms of forward non-GAAP P/E, the stock is currently trading at 6.62x, 67.6% lower than the industry average of 20.42x. Also, its forward EV/Sales of 1.36x is 65.1% lower than the industry average of 3.90x. Moreover, ASRT's forward Price/Sales of 1.26x is 73.1% lower than the industry average of 4.67x.
ASRT and BlinkRx, the premier patient access solution, established a partnership to help healthcare professionals and their patients who are undergoing Otrexup medication.
Dan Peisert, President and CEO of Assertio, said, “We are thrilled to partner with a leading digital pharmacy provider in BlinkRx that offers a compelling, convenient option and which aligns to our strategy of leveraging our digital platform and virtual engagement to better serve our patients.”
Here's what could shape ASRT's performance in the near term:
Robust Financials
During the first quarter ended March 31, 2022, ASRT's total revenue increased 36.1% year-over-year to $36.54 million. Its operating income grew 53.9% from the year-ago value to $11.56 million. The company’s net income and comprehensive income increased 99.5% from the prior-year quarter to $9.06 million. Its EPS amounted to $0.20.
Strong Profitability
ASRT's trailing-12-month gross profit margin of 87.4% is 58.7% higher than the industry average of 55%. Also, its ROC, net income margin, and ROA of 10.1%, 2.7%, and 0.96% compare to their negative industry averages. Furthermore, its asset turnover ratio of 0.36% is 4.9% higher than the industry average of 0.35%.
Impressive Growth Prospects
Street expects ASRT's revenues and EPS to rise 18.7% and 1433.3% year-over-year to $131.73 million and $0.4, respectively, in fiscal 2022. In addition, ASRT's EPS is expected to rise 25% in the current quarter. Moreover, the company has an impressive earnings surprise history, as it topped Street EPS estimates in two of the trailing four quarters.
Consensus Rating and Price Target Indicate Potential Upside
The only Wall Street analysts that rated ASRT rated it Buy. The 12-month median price target of $6.00 indicates a 64.8% potential upside.
POWR Ratings Reflect Solid Prospects
ASRT has an overall grade of A, equating to a Strong Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight different categories. ASRT has an A grade for Growth, Quality, and Value. Its solid earnings and revenue growth potential justify the Growth grade. ASRT's strong profitability is consistent with the Quality grade. In addition, the stock's lower-than-industry valuations are in sync with the Value grade.
Of the 169 stocks in the F-rated Medical – Pharmaceuticals industry, ASRT is ranked #11.
Beyond what I stated above, we have graded ASRT for Sentiment, Stability, and Momentum. Get all ASRT ratings here.
Bottom Line
The company reported impressive revenue and earnings growth in the last reported quarter. In addition, considering ASRT’s robust profitability, discounted valuation, and various strategic collaborations, the stock is poised to soar in the near term. So, we believe the stock could be a great buy now.
How Does Assertio Holdings Inc. (ASRT) Stack Up Against its Peers?
ASRT has an overall POWR Rating of A, which equates to a Strong Buy rating. Check out these other stocks within the same industry with A (Strong Buy) ratings: Merck & Co. Inc. (MRK), Pfizer Inc. (PFE), and Novo Nordisk A/S (NVO).
ASRT shares rose $0.01 (+0.27%) in premarket trading Friday. Year-to-date, ASRT has gained 66.97%, versus a -13.87% 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.
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