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Endo (ENDP) Crashes 46.54% as it Looks to Restructure Debt

·3 min read

Share of Endo International ENDP tanked 46.54% on May 18 after a Wall Street report stated that the company has started negotiations with its lenders and senior bondholders about a possible restructuring of more than $8 billion of debt.

Endo is already in deep trouble with several litigation suits over opioid sales, and this has been an overhang on its shares for quite some time now.

It has lost 83.2% in the year so far compared with the industry's 27% decline.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Earlier in the month, Endo reported first-quarter earnings of 66 cents per share, beating the Zacks Consensus Estimate of 44 cents but declining from 73 cents in the year-ago quarter. A significant increase in litigation expenses and selling, general and administrative expenses hurt the bottom line.

Revenues came in at $652 million in the first quarter, surpassing the Zacks Consensus Estimate of $641 million.  However, revenues were down 9% from the year-ago quarter due to decreased revenues from its Sterile Injectables segment, partially offset by increased revenues from its Generic Pharmaceuticals segment and the Specialty Products portfolio of its Branded Pharmaceuticals segment.

Sterile Injectables’ revenues came in at $240 million, down 22% year over year on decreased Vasostrict revenues due to generic competition and lower overall demand as COVID-19-related hospitalizations decline.

Moreover, the guidance for the second quarter was disappointing due to challenging market dynamics for Vasostrict. This hurt the stock as well.

Endo provided financial guidance only for the second quarter due to uncertainties in certain key assumptions. Revenues for the quarter are projected to be $500-$525 million. Adjusted loss per share is estimated at 17 cents to 15 cents.

As of Mar 2022, the company had $1.4 billion of cash and equivalents and long-term debt of $8.0 billion.

Zacks Rank & Stocks to Consider

Endo currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks are Alkermes ALKS, Halozyme HALO and Geron Corporation GERN. While Alkermes sports a Zacks Rank #1 (Strong Buy), Geron and HALO have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Loss estimates for ALKS for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed estimates in all of the trailing four quarters, the average surprise being 350.48%.

Earnings estimates for Halozyme for 2022 have risen 7 cents to $2.21 in the past 60 days.  Halozyme surpassed estimates in three of the trailing four quarters, the average surprise being 21.84%.

Loss estimates for GERN for 2022 have narrowed by 6 cents in the past 60 days. Geron surpassed estimates in three of the trailing four quarters, the average surprise being 1.07%.



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Endo International plc (ENDP) : Free Stock Analysis Report
 
Geron Corporation (GERN) : Free Stock Analysis Report
 
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Halozyme Therapeutics, Inc. (HALO) : Free Stock Analysis Report
 
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Zacks Investment Research