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Balchem (BCPC)
:BCPC
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Balchem
(NASDAQ:BCPC)
77Outperform
Positive Factors
Earnings
Balchem's revenue and earnings beat expectations, showing resilience to macro pressures.
Product Development
Balchem recently unveiled two new solutions, K2Vital Delta Fermented and VitaCholine Pro-Flo, which are expected to drive uptake and market demand.
Strategic Partnerships
The partnership with FC Bayern Women marks a key milestone in Balchem’s longer-term strategy to bridge the gap between B2B and B2C markets.
Negative Factors
Earnings Miss
Balchem's 4Q24 GAAP net earnings came in somewhat below the forecasted amount, indicating a moderate earnings miss.
Financial Performance
Macro pressures and market volatility have impacted share prices and revenue and earnings multiples.
Valuation
The applicable P/E multiple has declined to 38.8x from the prior 45x, resulting in a decrease in the 12-month price target to $180 from the previous $190.
Balchem (BCPC) vs. S&P 500 (SPY)
Market Cap
$5.28B
Dividend Yield0.54%
Average Volume (3M)227.34K
Price to Earnings (P/E)38.8
Beta (1Y)0.75
Revenue Growth3.76%
EPS Growth18.06%
CountryUS
Employees1,379
SectorBasic Materials
Sector Strength59
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)4.17
Shares Outstanding32,617,302
10 Day Avg. Volume219,735
30 Day Avg. Volume227,342
Financial Highlights & Ratios
PEG Ratio2.15
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.06
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit16.67
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$198.00Price Target Upside22.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Balchem Business Overview & Revenue Model
Company DescriptionBalchem Corporation (BCPC) is a publicly traded company specializing in niche markets within the health and nutrition sectors. The company operates through three primary segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. Balchem's offerings include microencapsulation, chelated mineral solutions, and specialty ingredients, serving industries ranging from food and beverage to pharmaceuticals and animal feed.
How the Company Makes MoneyBalchem Corporation generates revenue through the sale of its specialized products and solutions across its three main segments. In the Human Nutrition & Health segment, the company sells ingredients used in dietary supplements, food, and beverage products, focusing on enhancing health and wellness. The Animal Nutrition & Health segment offers nutritional products and supplements for livestock and poultry, aiming to improve animal health and productivity. In the Specialty Products segment, Balchem provides products like ethylene oxide for medical device sterilization and choline-based compounds for industrial applications. The company's earnings are bolstered by strategic partnerships with major industry players and ongoing innovation to meet evolving market demands.
Balchem Financial Statement Overview
Summary
Balchem showcases a solid financial performance with strong revenue growth and profitability. The company's low leverage and high equity ratio provide financial stability and flexibility. Despite a decline in free cash flow growth, cash flow metrics remain strong, reflecting efficient cash management. Overall, Balchem is well-positioned in the Chemicals - Specialty industry.Income Statement
Balchem demonstrates strong and consistent revenue growth with a TTM revenue increase of 1.14% over the previous year. Gross Profit Margin stands at 35.55%, indicating effective cost management, while the Net Profit Margin is 14.16%, showing robust bottom-line performance. The EBIT Margin is 19.95%, and the EBITDA Margin is 22.32%, reflecting solid operational efficiency.―
Balance Sheet
The company maintains a low Debt-to-Equity Ratio of 0.03, indicating conservative leverage practices. Return on Equity is a healthy 11.29%, showcasing efficient use of equity capital. The Equity Ratio is 74.73%, suggesting a strong capital structure with significant equity financing, enhancing financial stability.82
Cash Flow
Balchem's Free Cash Flow Growth Rate is negatively impacted compared to the previous year, but the company shows an impressive Operating Cash Flow to Net Income Ratio of 1.36, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is 1.14, underscoring efficient cash conversion.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 953.68M | 922.44M | 942.36M | 799.02M | 703.64M | Gross Profit |
| 336.21M | 302.06M | 280.45M | 243.17M | 223.90M | EBIT |
| 182.91M | 159.19M | 145.19M | 127.50M | 111.15M | EBITDA |
| 230.95M | 214.81M | 197.57M | 175.70M | 162.13M | Net Income Common Stockholders |
| 128.47M | 108.54M | 105.37M | 96.10M | 84.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 49.52M | 64.45M | 66.56M | 103.24M | 84.57M | Total Assets |
| 1.58B | 1.60B | 1.62B | 1.20B | 1.17B | Total Debt |
| 208.04M | 330.33M | 440.57M | 108.57M | 163.57M | Net Debt |
| 158.53M | 265.89M | 374.01M | 5.33M | 79.00M | Total Liabilities |
| 425.46M | 543.23M | 686.23M | 322.31M | 337.61M | Stockholders Equity |
| 1.15B | 1.05B | 938.28M | 877.01M | 828.23M |
| Cash Flow | Free Cash Flow | |||
| 146.34M | 145.87M | 88.25M | 123.06M | 116.67M | Operating Cash Flow |
| 182.00M | 183.76M | 138.54M | 160.51M | 150.49M | Investing Cash Flow |
| -59.74M | -34.81M | -416.01M | -35.30M | -34.59M | Financing Cash Flow |
| -133.81M | -153.32M | 246.68M | -102.18M | -101.16M |
Balchem Technical Analysis
Neutral
161.87
Price Trends
163.90
Negative
163.78
Negative
167.99
Negative
Market Momentum
-1.52
Negative
53.90
Neutral
76.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BCPC, the sentiment is Neutral. The current price of 161.87 is above the 20-day moving average (MA) of 157.74, below the 50-day MA of 163.90, and below the 200-day MA of 167.99, indicating a neutral trend. The MACD of -1.52 indicates Negative momentum. The RSI at 53.90 is Neutral, neither overbought nor oversold. The STOCH value of 76.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BCPC.
Balchem Risk Analysis
Balchem disclosed 26 risk factors in its most recent earnings report. Balchem reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Balchem Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.92B | 12.50 | 35.85% | 1.63% | 3.65% | 20.92% | |
77 Outperform | $5.28B | 38.77 | 11.94% | 0.54% | 3.76% | 18.06% | |
75 Outperform | $7.25B | 18.67 | 21.49% | ― | 1.77% | 47.48% | |
74 Outperform | $3.98B | 31.05 | 11.87% | 1.75% | 6.30% | 41.01% | |
72 Outperform | $5.11B | 17.87 | 11.75% | 1.52% | 6.08% | 117.61% | |
72 Outperform | $4.23B | 10.34 | 31.02% | 2.21% | 1.71% | -2.43% | |
49 Neutral | $1.95B | -1.27 | -21.38% | 3.72% | 0.83% | -29.30% |
* Basic Materials Sector Average
Performance Comparison
BCPC
Balchem
161.87
9.35
6.13%
CBT
Cabot
77.99
-16.30
-17.29%
NEU
Newmarket
627.99
85.66
15.79%
SXT
Sensient Technologies
93.73
19.97
27.07%
ESI
Element Solutions
21.07
-2.50
-10.61%
AXTA
Axalta Coating Systems
33.16
-2.32
-6.54%
Balchem Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 2.25%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Positive
Balchem Corporation showcased strong financial performance with record sales and significant growth across all segments. The company effectively managed costs and showed resilience in a challenging global trade environment. While there are some concerns regarding potential impacts from trade policies and increased tax rates, the overall performance and strategic positioning indicate a robust start to the fiscal year.Q1-2025 Updates
Positive Updates
Record First Quarter Consolidated Sales
Balchem Corporation reported record first quarter consolidated revenue of $251 million, which was 4.5% higher than the prior year quarter.
Substantial Growth in Adjusted EBITDA
The company delivered a record quarterly adjusted EBITDA of $66 million, an increase of 8.9% with an adjusted EBITDA margin of 26.5%, up 106 basis points from the prior year.
Significant Increase in Net Income
Consolidated net income for the quarter was $37 million, an increase of 27.8% from the prior year.
Strong Performance Across All Segments
All three segments, Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products, showed year-over-year sales and earnings growth.
Decreased Operating Expenses
Consolidated operating expenses for the first quarter were $37 million compared to $40 million in the prior year, primarily due to lower amortization expense and a decrease in compensation-related costs.
Negative Updates
Potential Impact of Global Trade Environment
The evolving global trade environment could impact Balchem's raw material imports and global demand, although current impacts are manageable.
Increased Effective Tax Rate
The effective tax rate for the first quarter of 2025 was 22.7%, up from 21.3% in the prior year, primarily due to lower tax benefits from stock-based compensation.
Company Guidance
During Balchem's First Quarter 2025 Earnings Conference Call, the company reported robust financial results, continuing the momentum from 2024. The first quarter saw record consolidated sales of $251 million, a 4.5% increase from the previous year, alongside an adjusted EBITDA of $66 million, marking an 8.9% rise with an adjusted EBITDA margin of 26.5%. Consolidated net income reached $37 million, a 27.8% increase, translating to a diluted net earnings per share of $1.13, a $0.24 rise. The Human Nutrition & Health segment reported record sales of $158 million, up 3.7%, and Animal Nutrition & Health sales rose by 6.2% to $57 million. Specialty Products also saw a 5.3% increase in sales, totaling $33 million. Balchem emphasized their strong market positions and resilience amidst a changing global trade environment, with strategies to offset impacts of tariffs and trade disputes. They maintained a solid balance sheet, with net debt of $140 million and an effective tax rate of 22.7%, up from 21.3% the previous year.Balchem Corporate Events
Executive/Board Changes
Balchem Announces Retirement of Chief Accounting Officer
Neutral
Mar 3, 2025
On March 3, 2025, Balchem Corporation announced the upcoming retirement of William A. Backus, their Vice President and Chief Accounting Officer, effective March 31, 2026. The company stated that there will be no changes to Mr. Backus’ compensatory arrangement due to his retirement, and his successor will be announced later.
Executive/Board ChangesBusiness Operations and Strategy
Balchem Approves Executive Severance Policy and Benefits
Neutral
Feb 14, 2025
On February 12, 2025, Balchem Corporation’s Compensation Committee approved the Executive Severance Policy, offering severance benefits to executive officers terminated without cause. Additionally, the company will match contributions to the Deferred Comp Plan up to 6% of base salary for participating executive officers.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.