Akorn, Inc. (AKRX) keeps pleasing its investors. This time with more acquisitions and raising its guidance.
Upward estimate revisions have pumped up the growth rates and pushed shares to a Zacks #1 Rank (Strong Buy).
Company Description
Akorn, Inc. makes multisource and branded pharmaceuticals. The company specializes in diagnostics and therapeutic products, hospital drugs and injectable pharmaceuticals.
Top Line Swells 59%
On Aug 2 Akorn reported quarterly results that were highlighted by a revenues of $32.1 million, a 59% increase over the same period last year. Most of the growth was organic was due to organic growth efforts, but $3.7 million was due to the recent acquisition of Advance Vision Research which makes OTC dry eye products.
The company met earnings expectations with $0.04 per share, but the increased guidance was enough to push analyst estimates higher.
Thanks to the upward revisions the Zacks Consensus Estimate for 2011 rose 8 cents, to $0.25. Next year’s jumped 9 cents, to $0.31. Last year the company made just a penny, so the earnings growth rates are exponential. The long-term growth rate is currently 26%.
Solid Investment
Akorn also said that it is taking a minority stake in Aclex, a private ophthalmic company. Analysts like the strategic investment and a good use of the company’s growing cash reserve.
Grinding Higher
Shares of AKRX can be volatile, but the overall trend has them grinding higher and higher. Some pharmaceuticals can get pricey, but at about 25 times the 2012 estimates and a sub 1.0 PEG ratio this one is a solid deal.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
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