Since April 2025, Amphastar Pharmaceuticals has been in a holding pattern, floating around $24.52. The stock also fell short of the S&P 500’s 22.9% gain during that period.
Is there a buying opportunity in Amphastar Pharmaceuticals, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free for active Edge members.
Why Is Amphastar Pharmaceuticals Not Exciting?
We're swiping left on Amphastar Pharmaceuticals for now. Here are two reasons you should be careful with AMPH and a stock we'd rather own.
1. Fewer Distribution Channels Limit its Ceiling
Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.
With just $722.7 million in revenue over the past 12 months, Amphastar Pharmaceuticals is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.
2. Projected Revenue Growth Shows Limited Upside
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Amphastar Pharmaceuticals’s revenue to stall, a deceleration versus its 16.7% annualized growth for the past five years. This projection doesn't excite us and implies its products and services will face some demand challenges.
Final Judgment
Amphastar Pharmaceuticals isn’t a terrible business, but it isn’t one of our picks. With its shares underperforming the market lately, the stock trades at 7.5× forward P/E (or $24.52 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere. We’d suggest looking at a top digital advertising platform riding the creator economy.
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