Endo Pharmaceuticals Earnings Preview

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Endo Pharmaceuticals (NAS: ENDP) didn't meet the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Thursday, Oct. 27. Endo Pharmaceuticals is a specialty pharmaceutical company, engaged in the research, development, sale, and marketing of branded and generic prescription pharmaceuticals used to treat and manage pain.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Endo Pharmaceuticals while the remaining half rate the stock as a buy. Analysts don't like Endo Pharmaceuticals as much as competitor Par Pharmaceutical Companies overall. Six out of nine analysts rate Par Pharmaceutical Companies a buy compared to 10 of 20 for Endo Pharmaceuticals. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $752.4 million in revenue this quarter. That would represent a rise of 69.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.18 per share. Estimates range from $1.12 to $1.22.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.7% awarding it an "outperform" rating. The community at large backs the All-Stars with 96.2% giving it a rating of "outperform." Fools have embraced Endo Pharmaceuticals and haven't been shy with their opinions lately, logging 175 posts in the past 30 days. Endo Pharmaceuticals has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Endo Pharmaceuticals' income has fallen year over year by an average of 7.2% over the past five quarters. The company's gross margin shrank by 11.9 percentage points in the last quarter. Revenue rose 53.2% while cost of sales rose 120.8% to $236.7 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

61.0%

58.7%

66.8%

69.8%

Operating Margin

22.1%

21.6%

29.2%

26.1%

Net Margin

9.0%

10.0%

18.2%

12.2%

One final thing: If you want to keep tabs on Endo Pharmaceuticals movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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