Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 8.8 |
| EV/EBITDA | 3.9 |
| Fwd P/E | 7.4 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 16.7x
- ▸PEG: 0.11
AMRX · Why this verdict
Why Amneal Pharmaceuticals (AMRX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Four customers (Cencora, McKesson, Cardinal Health and CVS Health) account for 71.0% of sales, so a pricing dispute with one would hit revenue disproportionately. Bear case | Customer concentration should stay near current levels without margin concessions. | ↓Deteriorating |
| CounterWholesaler concentration is standard in generics distribution and these customers are pass-through buyers, so the practical risk may be lower than the percentage implies. | ||
Amneal has beaten EPS estimates in 3 of the last 3 reported quarters, with an average surprise of 34.7%. Avg surprise pct | The beat pattern should continue at the November 3 report. | ↑Improving |
| CounterLarge percentage surprises on low per-share figures may reflect low bars, and the price near its 52-week high already discounts a beat. | ||
Earnings quality is flagged as a red flag because free cash flow is -73% of net income, despite a strong 8/9 Piotroski F-Score. Quality breakdown | Free cash flow should turn positive and move toward net income. | →Stable |
| CounterGeneric drug makers face working-capital and inventory swings, so a single negative reading may not indicate deteriorating earnings quality. | ||
The price of $21.51 is 5.2% above the $20.38 analyst target, 0.8% from the 52-week high, with 12.6% downside and negative reward-to-risk of -0.41. Upside pct | Analyst targets should be raised toward the price, or the price should pull back toward the $20.89 entry level. | ↑Improving |
| CounterA breakout with a golden cross and rising volume suggests analysts may be lagging a genuine re-rating. | ||
Revenue grew about 9.9% YoY, from $724.5 million to $796.2 million in the June 2026 quarter, and the growth score is 7.5/10. Revenue quarters | Revenue should continue toward the $818 million next-quarter estimate. | ↑Improving |
| CounterRevenue fell sequentially from $814 million in the December 2025 quarter to $722.5 million in March 2026, so growth is uneven. | ||
Four customers (Cencora, McKesson, Cardinal Health and CVS Health) account for 71.0% of sales, so a pricing dispute with one would hit revenue disproportionately.
↓DeterioratingBear case
- Expectation
- Customer concentration should stay near current levels without margin concessions.
CounterWholesaler concentration is standard in generics distribution and these customers are pass-through buyers, so the practical risk may be lower than the percentage implies.
Amneal has beaten EPS estimates in 3 of the last 3 reported quarters, with an average surprise of 34.7%.
↑ImprovingAvg surprise pct
- Expectation
- The beat pattern should continue at the November 3 report.
CounterLarge percentage surprises on low per-share figures may reflect low bars, and the price near its 52-week high already discounts a beat.
Earnings quality is flagged as a red flag because free cash flow is -73% of net income, despite a strong 8/9 Piotroski F-Score.
→StableQuality breakdown
- Expectation
- Free cash flow should turn positive and move toward net income.
CounterGeneric drug makers face working-capital and inventory swings, so a single negative reading may not indicate deteriorating earnings quality.
The price of $21.51 is 5.2% above the $20.38 analyst target, 0.8% from the 52-week high, with 12.6% downside and negative reward-to-risk of -0.41.
↑ImprovingUpside pct
- Expectation
- Analyst targets should be raised toward the price, or the price should pull back toward the $20.89 entry level.
CounterA breakout with a golden cross and rising volume suggests analysts may be lagging a genuine re-rating.
Revenue grew about 9.9% YoY, from $724.5 million to $796.2 million in the June 2026 quarter, and the growth score is 7.5/10.
↑ImprovingRevenue quarters
- Expectation
- Revenue should continue toward the $818 million next-quarter estimate.
CounterRevenue fell sequentially from $814 million in the December 2025 quarter to $722.5 million in March 2026, so growth is uneven.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 5.7 |
| Gross margin | 4.0 |
| Op margin | 7.3 |
| Net margin | 2.5 |
| Current ratio | 7.6 |
| FCF quality | 0.0 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -73% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.0 |
| EPS growth | 10.0 |
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 3.6 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 6.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.7 |
| Price target | 7.2 |
- ▸LLM news sentiment: +0.40 (n=4)
- ▸Light analyst coverage (7.0) — signal dampened
Insider
3.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.6 |
- ▸Notable insider selling — $7,216,567 (0.103% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 7.6 |
| growth rank | 4.9 |
- ▸Superior ROE vs peers
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.9 |
| support resistance | 5.1 |
| 52w position | 8.6 |
| gap | 6.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 6.9 |
| volatility | 4.1 |
| put call | 0.0 |
| implied vol | 1.2 |
| beta | 6.2 |
| debt equity | 0.0 |
| news risk | 6.0 |
- ▸Elevated put/call: 5.10
- ▸High IV: 73%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.1>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:EARNINGS:0.80
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (1)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.12
Upside
+0.9%
Downside
7.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 8.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.1<1.5@spot) reinforce the read. Current asymmetry R:R is 0.12 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 8.2, Growth at 7.5, and Sentiment at 7.3; the weakest are Insider at 3.5, Risk (lower is worse) at 3.9, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.12 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Earnings Beat Streak
Trip ifEPS surprise falls below 0% on the November 3 report.
- P2Negative Cash Conversion Flag
Trip ifFCF-to-net-income conversion rises above 50% for 2 consecutive quarters.
- P3Wholesaler Customer Concentration
Trip ifTop-customer share of sales exceeds 80% from the current 71%.
- P4Price Above Analyst Target
Trip ifAnalyst target rises above $24, at least 11% above the current $21.51 price.
- P5Steady Revenue Growth
Trip ifRevenue growth falls below 3% YoY for 2 consecutive quarters.