Lannett: Zacks’ Bull of the Day Play

Lannett Company, Inc. (LCISnapshot Report) is cashing in on the demand for generic drugs. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the triple digits in fiscal 2015.

Lannett, with a $2 billion market cap, makes thyroid, cardiovascular and pain management generic drugs.

Record Fiscal Q2 Results

On Feb 4, Lannett reported its fiscal second quarter 2015 results and blew by the Zacks Consensus Estimate by $0.15.

Earnings were $1.21 compared to the Consensus of $1.06.

Net sales jumped 71% to $114.5 million as strong sales and gross margin across several product areas boosted the quarter.

It was the 9th consecutive quarter of record net sales.

The company also has pricing power and has been able to raise prices, which has contributed to the strong growth.

Raised Full Year Guidance

For the first 6 months of fiscal 2015, net sales jumped 84% to $208.2 million.

Lannett doesn’t see performance slowing in the second half of the fiscal year. It raised net sales guidance to a range of $395 million to $405 million from $370 million to $390 million.

The analysts are equally as bullish.

3 estimates were raised since the earnings report for fiscal 2015 pushing the Zacks Consensus up sharply to $4.02 from $3.59.

That’s earnings growth of 103% as the Lannett only made $1.98 last year.

Shares Pop on Earnings News

Not surprisingly, shares rallied on the solid earnings report and are now trading near 2-year highs.

But there may be more room to run as Lannett is trading with a forward P/E of just 14. That’s under the average of the S&P 500 which is 17.4x.

For investors looking for a drug-company play with big earnings growth, Lannett is one to keep on your short list.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.


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