Value
8.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 8.6 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 1.9x
- ▸PEG: 0.01
- ▸Attractively valued
BHC · Why this verdict
Why Bausch Health Companies (BHC) is rated HOLD
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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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Bausch Health is a deeply discounted specialty pharma (forward P/E 1.9x, FCF yield 53.5%) with a strong beat streak and momentum, but the price is 18.3% above the analyst target and revenue depends heavily on a few products.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Valuation is extremely low with a forward P/E of 1.9x and an FCF yield of 53.5% despite a GAAP loss, and a Piotroski F-Score of 9/9. Quality breakdown | Free cash flow stays above 10% of revenue and the discount narrows as debt service proves sustainable. | ↓Deteriorating |
| CounterA 53.5% FCF yield on a heavily indebted company signals the market is pricing distress or a legal and refinancing risk, not a bargain. | ||
The company beat estimates in 3 of the last 4 quarters with average surprise of 16.9%, and quarterly revenue has grown to $2.94B from $2.68B a year earlier. Earnings | Beats continue and revenue holds above $2.8B per quarter. | ↑Improving |
| CounterOne miss in four quarters and small insider selling suggest results are not uniformly strong, and revenue growth scores only 4.9/10. | ||
Revenue concentration is a major risk: 2 high concentration risks include Xifaxan (85.0%) and Arestin (95.0%) within their product categories. Bear case | Diversification improves and Xifaxan generic-entry risk does not erode sales over the next 12 months. | ↓Deteriorating |
| CounterConcentration in proven branded products can produce high margins; the real threat is loss of exclusivity. | ||
At $8.20 the stock is 18.3% above the $6.70 analyst target, so upside to consensus is exhausted and the stop implies 15.0% downside. Warnings | Analyst targets are revised above $8.20, or price eases back toward $6.70. | ↓Deteriorating |
| CounterAnalysts may be stale: a company beating estimates with a sub-2x forward P/E could see targets revised sharply higher. | ||
Momentum is strong at 7.4/10 with rising OBV, but RSI is 77 (overbought) with a flat long-term average, and the put/call ratio of 1.81 and 75% implied volatility show heavy hedging. Momentum breakdown | RSI cools below 70 while price holds above the 200-day average. | ↑Improving |
| CounterOverbought readings in a strong accumulation trend can persist, and elevated puts may be hedging by long holders. | ||
Valuation is extremely low with a forward P/E of 1.9x and an FCF yield of 53.5% despite a GAAP loss, and a Piotroski F-Score of 9/9.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow stays above 10% of revenue and the discount narrows as debt service proves sustainable.
CounterA 53.5% FCF yield on a heavily indebted company signals the market is pricing distress or a legal and refinancing risk, not a bargain.
The company beat estimates in 3 of the last 4 quarters with average surprise of 16.9%, and quarterly revenue has grown to $2.94B from $2.68B a year earlier.
↑ImprovingEarnings
- Expectation
- Beats continue and revenue holds above $2.8B per quarter.
CounterOne miss in four quarters and small insider selling suggest results are not uniformly strong, and revenue growth scores only 4.9/10.
Revenue concentration is a major risk: 2 high concentration risks include Xifaxan (85.0%) and Arestin (95.0%) within their product categories.
↓DeterioratingBear case
- Expectation
- Diversification improves and Xifaxan generic-entry risk does not erode sales over the next 12 months.
CounterConcentration in proven branded products can produce high margins; the real threat is loss of exclusivity.
At $8.20 the stock is 18.3% above the $6.70 analyst target, so upside to consensus is exhausted and the stop implies 15.0% downside.
↓DeterioratingWarnings
- Expectation
- Analyst targets are revised above $8.20, or price eases back toward $6.70.
CounterAnalysts may be stale: a company beating estimates with a sub-2x forward P/E could see targets revised sharply higher.
Momentum is strong at 7.4/10 with rising OBV, but RSI is 77 (overbought) with a flat long-term average, and the put/call ratio of 1.81 and 75% implied volatility show heavy hedging.
↑ImprovingMomentum breakdown
- Expectation
- RSI cools below 70 while price holds above the 200-day average.
CounterOverbought readings in a strong accumulation trend can persist, and elevated puts may be hedging by long holders.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 4.8 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 5.7 |
| FCF quality | 7.0 |
| Moat | 5.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸FCF-positive despite GAAP loss (FCF margin 15%, FCF yield 53.8%)
- ▸Rule of 40: 24 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 10.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 1.9 |
- ▸Overbought (RSI 76)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 76 (late-cycle distribution risk)
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 5.0 |
| Price target | 4.7 |
Insider
4.8/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.5 |
- ▸Insider selling (low materiality) — $258,894 (0.008% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.3 |
| quality rank | 1.3 |
| growth rank | 4.6 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 2.7 |
| 52w position | 8.0 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 6.2 |
| volatility | 0.0 |
| put call | 3.5 |
| implied vol | 2.0 |
| beta | 10.0 |
- ▸High IV: 68%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD_NO_UPSIDEPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:105d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.97
Upside
-14.5%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.0B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.7>=5.5. Top dim: Value at 8.3; weakest: Technical at 3.9. No conviction either direction.
The strongest dimensions are Value at 8.3, Growth at 7.5, and Momentum at 6.7; the weakest are Technical at 3.9, Insider at 4.8, and Risk (lower is worse) at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Extreme Valuation And Fcf Yield
Trip ifFCF margin falls below 8% from the current 15%.
- P2Earnings Beat Momentum
Trip ifEPS misses estimates in more than 1 of the next 4 quarters.
- P3Product Concentration Risk
Trip ifQuarterly revenue falls below $2.5B from the current $2.94B.
- P4Price Above Analyst Target
Trip ifPrice rises above $10, exceeding the $6.70 analyst target by more than 45%.
- P5Overbought With Heavy Hedging
Trip ifPut/call ratio exceeds 2.5 from the current 1.81.