GeoInvesting has begun to establish a small position in shares of Pernix Therapeutics (PTX) based on analyst expectations that strong growth is in the cards for 2015 and 2016. Yesterday, via a premium tweet we stated we began to nibble at shares of PTX, a company that has been on our radar since August 1, 2014 when we stated:
“The GeoTeam is beginning to track the stock due to explosive revenue growth estimates for fiscal 2014 and 2015 of 60% and 62%, respectively. The company has also reported 2 profitable quarters in a row after reporting 10 straight quarterly losses.”
Bottom Line to Improve Substantially
While the company did achieve substantial revenue growth in 2014, profitability levels were not attractive enough for our team to take a position . However, it appears that the bottom line is about to improve substantially, helped along by product acquisition activity, the launch of new products, and an expanded sales team.
The company closed out 2014 on a strong note and analyst estimates are strong.
Notes from February 25, 2015 year end press release:
- Full year 2014 net sales of $121.7 million exceeded guidance of $110 million to $120 million and reflect an increase of 43% versus 2013
- Full year adjusted EBITDA of $23.8 million versus ($5.7) million for the full year 2013, in line with FY2014 guidance of $22.0 million – $24.0 million
- Full year adjusted net income / (loss) per share of $0.18; versus ($0.06) for the full year 2013
“2014 was a very active year for Pernix, and the fourth quarter was no exception as we finished the year with almost $122 million in sales,” said Doug Drysdale, Chairman, President and Chief Executive Officer. “Our expanded sales force launched three CNS products during the year and made a significant impact on both Silenor and Treximet prescription trends. We remain extremely active in pursuing additional products in our business development pipeline to continue to leverage our established commercial platform.”
Analysts are calling for:
- 2015 and 2106 revenue to increase to $221M and $258M, respectively .
- 2015 and 2106 revenue to increase to $0.92 and $1.98, respectively .
It is worth noting that the possibility of analyst upgrades could be in the cards since the company’s revenues guidance appears higher.
“Today the Company confirms its prior FY2015 guidance of $230mm of net revenues and $95mm of Adjusted EBITDA.”
We will listen to the year end conference call and attempt to interview management this week.
Caveats:
- Do analyst estimates factor in PTX fully share count?
- Are estimates are fully taxed? If numbers are not taxed our decision to add or hold our shares of PTX could change.
- Litigation issues exist The company has reserved for this issue, but “any material liability, in excess of our reserve, resulting from this claim could negatively impact our financial results.”
To stay ahead of the market with GeoInvesting arbitrage and learn about investment ideas not yet digested by the market, Sign up now for More Research and Insight