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Also traded in: Canada, Germany, Mexico, Switzerland, UK

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 3/10

vs
industry
vs
history
Cash-to-Debt 0.04
VRX's Cash-to-Debt is ranked lower than
97% of the 886 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 3.53 vs. VRX: 0.04 )
Ranked among companies with meaningful Cash-to-Debt only.
VRX' s Cash-to-Debt Range Over the Past 10 Years
Min: -1.06  Med: 0.18 Max: No Debt
Current: 0.04
-1.06
No Debt
Equity-to-Asset 0.12
VRX's Equity-to-Asset is ranked lower than
94% of the 801 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 0.64 vs. VRX: 0.12 )
Ranked among companies with meaningful Equity-to-Asset only.
VRX' s Equity-to-Asset Range Over the Past 10 Years
Min: 0.07  Med: 0.46 Max: 0.85
Current: 0.12
0.07
0.85
Debt-to-Equity 5.71
VRX's Debt-to-Equity is ranked lower than
98% of the 540 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 0.32 vs. VRX: 5.71 )
Ranked among companies with meaningful Debt-to-Equity only.
VRX' s Debt-to-Equity Range Over the Past 10 Years
Min: 0.04  Med: 0.81 Max: 9.47
Current: 5.71
0.04
9.47
Debt-to-EBITDA 42.64
VRX's Debt-to-EBITDA is ranked lower than
90% of the 522 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 1.83 vs. VRX: 42.64 )
Ranked among companies with meaningful Debt-to-EBITDA only.
VRX' s Debt-to-EBITDA Range Over the Past 10 Years
Min: 0.28  Med: 8.32 Max: 36
Current: 42.64
0.28
36
Interest Coverage 0.23
VRX's Interest Coverage is ranked lower than
100% of the 683 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 132.39 vs. VRX: 0.23 )
Ranked among companies with meaningful Interest Coverage only.
VRX' s Interest Coverage Range Over the Past 10 Years
Min: 0.29  Med: 1.59 Max: 190.88
Current: 0.23
0.29
190.88
Piotroski F-Score: 4
Altman Z-Score: 0.03
Beneish M-Score: -2.59
WACC vs ROIC
-3.35%
-1.93%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 7/10

vs
industry
vs
history
Operating Margin % 4.82
VRX's Operating Margin % is ranked lower than
69% of the 819 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 7.96 vs. VRX: 4.82 )
Ranked among companies with meaningful Operating Margin % only.
VRX' s Operating Margin % Range Over the Past 10 Years
Min: 6.17  Med: 21.76 Max: 27.43
Current: 4.82
6.17
27.43
Net Margin % -11.61
VRX's Net Margin % is ranked higher than
93% of the 819 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 5.73 vs. VRX: -11.61 )
Ranked among companies with meaningful Net Margin % only.
VRX' s Net Margin % Range Over the Past 10 Years
Min: -24.9  Med: 1.89 Max: 27.56
Current: -11.61
-24.9
27.56
ROE % -21.23
VRX's ROE % is ranked higher than
98% of the 857 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 6.75 vs. VRX: -21.23 )
Ranked among companies with meaningful ROE % only.
VRX' s ROE % Range Over the Past 10 Years
Min: -52.21  Med: 0.33 Max: 52.6
Current: -21.23
-52.21
52.6
ROA % -2.51
VRX's ROA % is ranked higher than
61% of the 888 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 3.29 vs. VRX: -2.51 )
Ranked among companies with meaningful ROA % only.
VRX' s ROA % Range Over the Past 10 Years
Min: -5.13  Med: 0.3 Max: 13.02
Current: -2.51
-5.13
13.02
ROC (Joel Greenblatt) % -124.74
VRX's ROC (Joel Greenblatt) % is ranked lower than
63% of the 869 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 12.64 vs. VRX: -124.74 )
Ranked among companies with meaningful ROC (Joel Greenblatt) % only.
VRX' s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: -71.29  Med: 37.24 Max: 144.06
Current: -124.74
-71.29
144.06
3-Year Revenue Growth Rate 4.60
VRX's 3-Year Revenue Growth Rate is ranked lower than
53% of the 681 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 5.40 vs. VRX: 4.60 )
Ranked among companies with meaningful 3-Year Revenue Growth Rate only.
VRX' s 3-Year Revenue Growth Rate Range Over the Past 10 Years
Min: -10.8  Med: 27.3 Max: 82.5
Current: 4.6
-10.8
82.5
3-Year EBITDA Growth Rate -4.40
VRX's 3-Year EBITDA Growth Rate is ranked lower than
75% of the 691 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 9.90 vs. VRX: -4.40 )
Ranked among companies with meaningful 3-Year EBITDA Growth Rate only.
VRX' s 3-Year EBITDA Growth Rate Range Over the Past 10 Years
Min: -33.6  Med: 18.55 Max: 269.1
Current: -4.4
-33.6
269.1
3-Year EPS without NRI Growth Rate 43.10
VRX's 3-Year EPS without NRI Growth Rate is ranked higher than
86% of the 657 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 10.20 vs. VRX: 43.10 )
Ranked among companies with meaningful 3-Year EPS without NRI Growth Rate only.
VRX' s 3-Year EPS without NRI Growth Rate Range Over the Past 10 Years
Min: 0  Med: -3.7 Max: 101
Current: 43.1
0
101
GuruFocus has detected 5 Warning Signs with Valeant Pharmaceuticals International Inc VRX.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
» VRX's 30-Y Financials

Financials (Next Earnings Date: 2018-08-08)


Revenue & Net Income
Cash & Debt
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

» Details

Guru Trades

Q2 2017

VRX Guru Trades in Q2 2017

Robert Bruce 581,000 sh (New)
Ray Dalio 70,269 sh (New)
Jim Simons 2,402,589 sh (New)
Joel Greenblatt 823,046 sh (New)
Francis Chou 3,053,843 sh (+29.74%)
John Paulson 21,813,400 sh (+12.53%)
Diamond Hill Capital 34,500 sh (unchged)
George Soros 1,650,000 sh (unchged)
Jeff Ubben 17,997,224 sh (unchged)
Chris Davis Sold Out
Private Capital Sold Out
Murray Stahl 26,273 sh (-0.80%)
First Eagle Investment 551,300 sh (-10.08%)
Steven Cohen 50,000 sh (-86.07%)
» More
Q3 2017

VRX Guru Trades in Q3 2017

Lee Ainslie 276,490 sh (New)
Jim Simons 4,780,500 sh (+98.97%)
Jeff Ubben 18,010,027 sh (+0.07%)
Diamond Hill Capital 34,500 sh (unchged)
First Eagle Investment 551,300 sh (unchged)
Ray Dalio 70,269 sh (unchged)
Murray Stahl 26,273 sh (unchged)
George Soros 2,160,000 sh (unchged)
Francis Chou 3,053,843 sh (unchged)
Steven Cohen 3,500,000 sh (unchged)
Robert Bruce 581,000 sh (unchged)
Steven Cohen Sold Out
John Paulson 20,839,035 sh (-4.47%)
Joel Greenblatt 475,002 sh (-42.29%)
» More
Q4 2017

VRX Guru Trades in Q4 2017

Mario Gabelli 12,000 sh (New)
Pioneer Investments 89,191 sh (New)
Steven Cohen 60,000 sh (New)
Jim Simons 10,651,189 sh (+122.80%)
Lee Ainslie 435,630 sh (+57.56%)
Robert Bruce 599,000 sh (+3.10%)
Diamond Hill Capital 34,500 sh (unchged)
George Soros 1,500,000 sh (unchged)
John Paulson 20,839,035 sh (unchged)
Jeff Ubben 18,010,027 sh (unchged)
First Eagle Investment Sold Out
Murray Stahl 22,739 sh (-13.45%)
Ray Dalio 41,855 sh (-40.44%)
Joel Greenblatt 32,406 sh (-93.18%)
Francis Chou 148,992 sh (-95.12%)
» More
Q1 2018

VRX Guru Trades in Q1 2018

Francis Chou 1,648,992 sh (+1006.77%)
Steven Cohen 500,000 sh (+733.33%)
Lee Ainslie 635,980 sh (+45.99%)
Robert Bruce 855,000 sh (+42.74%)
Joel Greenblatt 32,408 sh (+0.01%)
Jeff Ubben 18,011,537 sh (+0.01%)
Murray Stahl 22,739 sh (unchged)
George Soros 350,000 sh (unchged)
John Paulson 20,839,035 sh (unchged)
Diamond Hill Capital Sold Out
Mario Gabelli Sold Out
Ray Dalio 40,946 sh (-2.17%)
Pioneer Investments 72,110 sh (-19.15%)
Jim Simons 4,975,689 sh (-53.29%)
» More
» Details

Insider Trades

Latest Guru Trades with VRX

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Robert Bruce 2018-03-31 Add 42.74%0.92%$14.88 - $23.87 $ 22.0318%855,000
Joel Greenblatt 2018-03-31 Add 0.01%$14.88 - $23.87 $ 22.0318%32,408
Mario Gabelli 2018-03-31 Sold Out $14.88 - $23.87 $ 22.0318%0
Robert Bruce 2017-12-31 Add 3.10%0.09%$11.06 - $22.05 $ 22.0339%599,000
Joel Greenblatt 2017-12-31 Reduce -93.18%0.09%$11.06 - $22.05 $ 22.0339%32,406
Mario Gabelli 2017-12-31 New Buy$11.06 - $22.05 $ 22.0339%12,000
First Eagle Investment 2017-12-31 Sold Out 0.02%$11.06 - $22.05 $ 22.0339%0
John Paulson 2017-09-30 Reduce -4.47%0.23%$13.1 - $17.77 $ 22.0346%20,839,035
Joel Greenblatt 2017-09-30 Reduce -42.29%0.08%$13.1 - $17.77 $ 22.0346%475,002
John Paulson 2017-08-09 Reduce -4.47%0.21%Premium Member Access $15.64 $ 22.0341%20,839,035
John Paulson 2017-06-30 Add 12.53%0.57%$8.51 - $17.31 $ 22.0384%21,813,400
Joel Greenblatt 2017-06-30 New Buy0.2%$8.51 - $17.31 $ 22.0384%823,046
Robert Bruce 2017-06-30 New Buy2.59%$8.51 - $17.31 $ 22.0384%581,000
First Eagle Investment 2017-06-30 Reduce -10.08%$8.51 - $17.31 $ 22.0385%551,300
Chris Davis 2017-06-30 Sold Out 0.19%$8.51 - $17.31 $ 22.0384%0
Private Capital 2017-06-30 Sold Out 0.82%$8.51 - $17.31 $ 22.0384%0
John Paulson 2017-06-14 Add 12.53%0.4%Premium Member Access $12.46 $ 22.0377%21,813,400
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Business Description

Industry: Drug Manufacturers » Drug Manufacturers - Specialty & Generic    NAICS: 325412    SIC: 3741
Compare:BOM:532321, SZSE:002773, SZSE:000423, SHSE:600566, HKSE:00867, TSE:4530, SZSE:002001, BSP:HYPE3, SHSE:600521, NYSE:CTLT, NSE:AUROPHARMA, BOM:500257, SHSE:603858, SZSE:000513, SZSE:300142, TSE:4506, BOM:500124, TSE:4516, SZSE:300601, SHSE:600535 » details
Traded in other countries:VRX.Canada, BVF.Germany, VRX N.Mexico, VRX.Switzerland, 0QYW.UK,
Headquarter Location:Canada
Valeant Pharmaceuticals International Inc is a specialty pharmaceutical and medical device company which develops, manufactures, and markets a range of generic and branded generic pharmaceuticals, over-the-counter products and medical devices.

Valeant Pharmaceuticals is a global specialty pharmaceutical firm with a focus on branded products for the dermatology, gastrointestinal, and ophthalmology markets. The firm also has a branded generics business that operates primarily in Latin America, Eastern Europe, and Asia.

Guru Investment Theses on Valeant Pharmaceuticals International Inc

Bill Ackman Comments on Valeant in Annual Shareholder Letter - May 08, 2017

We recently sold Valeant at a price that may end up looking cheap. Why?

At the time of sale, Valeant represented about 3% of the Company. If the stock price had increased even very substantially from here, the impact on our overall performance would have been modest, and would not compensate us for the human resources and substantial mindshare that this investment had and would have continued to consume if we had remained a shareholder. Furthermore, while Valeant has made significant progress and we expect management to continue to do so, there is still a lot of work to be done.

Clearly, our investment in Valeant (NYSE:VRX) was a huge mistake. The highly acquisitive nature of Valeant’s business required flawless capital allocation and operational execution, and therefore, a larger than normal degree of reliance on management. In retrospect, we misjudged the prior management team and this contributed to our loss. We deeply regret this mistake, which has cost all of us a tremendous amount, and which has damaged the record of success of our firm.

While there are many lessons from our investment in Valeant which we have previously discussed at length, we highlight a few important reminders from this experience:

  • Mana gement’s historic ability to d eploy capital i n acquisitions and earn high rates of return is not a sufficiently durab e asset that one can assign m aterial value t o in assessing the intrinsic va lue of a busin ess.

When we acquired V aleant, we vie wed our purch ase price as re presenting a m odest discount to the value of the comp ny’s existing assets, but a large discount to intrinsic value in light of ou r expectation that managem ent would continue to b e able to invest capital in new transactions on terms that w ould create significant long term value as it had done over the previ ous eight years . In retrospect, it appears that prior management substantially overp aid for the com pany’s largest acquisition – its acquisition of Salix – which occurred c ntemporaneo sly with t he substantial majority of ou r investment in the company.

  • Intrin ic value can be dramatically affected by ch anges in regulations, politics , or other extrinsic factors we cannot control, and the existence of these factors is a highly im portant consideration in position sizing.

In retrospect, our in estment in Valeant was too arge a percentage of capital in light of the greater risk of these factors having a negative impact o n intrinsic valu e.

  • A ma agement team with a superb long-term investment record is still capable of making significant mist akes.

We ha d the opportu ity to work al ongside Valea nt management for nearly one year on the Allergan transa ction, and were favorably impressed. In p articular, ma nagement’s de cision to walk away from the Allergan deal on terms that we believed continued t o offer high ra tes of return an d significant s trategic value reinforced our view that the company had a highly disc iplined approach to investin g capital. This coupled with the company’s histor c acquisition a nd integration track record o ver approxima tely 100 previous transactio ns gave us com fort that the Salix transa tion would be highly value- reating for Va leant. In retro spect, it appea rs that the com pany substantially overpa d for Salix, and it has not yet achieved the results anticipated by prior anagement.

  • A large stock price d ecline can destroy substantia l amounts of intrinsic value due to its effe cts on morale, retent on and recruitment, and the perception and reputation of a company.

Our s perb investme nt results in General Growth Properties, where the stock price had declined more tha 99% before we made our first purchase, gave us confi dence that we could assist V aleant in a turnaround after its stock price collapse . In retrospect, Valeant’s un derlying busin esses were not sufficiently d urable to withstand the impact of the rep utational dam age caused by the stock price decline, negative media atte ntion, and its impact on employee morale, retention, recruitment and the repu tation of the company.

My appro a ch to mistakes is that I personally assume 00% of the responsibility on behalf of the firm while sha ring the credit f or our successes. While I an d the rest of th e Pershing Square team hav e suffered significant losses f rom this failed investment as we are collectively the large t investors in the funds, it is much more pa inful to lose our shareholders’ money, an d for this I deeply and profou ndly apologiz e.

We are ex tremely focused and working hard to contin ue to repair the damage from our investment in Valeant y diligently overseeing ou r existing portfolio companies and identifying new opportunities. With a strong commitment to the core principles that have generate d the vast majo rity of our ret urns since ince ption and the best and most e xperienced tea m that we have had since th e formation of the firm more than 13 years ago, we are w ell positioned for a strong recovery.

From 2016 annual letter to shareholders of Pershing Square by Bill Ackman (Trades, Portfolio).

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Francis Chou Comments on Valeant - Mar 24, 2017

At the current price, Valeant (NYSE:VRX) stock is not a mouth-watering bargain at less than 3 times earnings or less than 2 times free cash flow because it carries around $30 billion of debt, but it is still relatively cheap. If Valeant can reduce its debt by as much as $8 billion as stated by management, through a combination of organic earnings and the sale of non-core assets, it will remove the feeling that the company is standing on the edge of a precipice.

A large debt means that any small misstep or missed guidance could result in bankruptcy. If the company’s debt is reduced, it will then be valued based on the free cash flow generated from operations. In addition, Valeant is also undergoing criminal investigations over its ties with Philidor. However, we believe the impact of these litigations is likely to be rather limited given that it pertains to only 5% of its revenue. Although, we do emphasize that it is difficult to accurately predict the outcome or impact of any lawsuit.

In conclusion:

  • Valeant could return to trading at the normal multiples if its debt is significantly reduced and the impact and costs of litigations are determined.

  • The company appears to have good cash flow characteristics, resulting from solid portfolio pipelines.

  • While we believe Valeant is cheap, the undervaluation is not as deep as it first appears. One must look at return on a fully capitalized basis to get the full picture. Based on the information we now have, the initial price we paid was on the high side but we believe that the intrinsic value is higher than the average cost we have paid for Valeant.

From Francis Chou (Trades, Portfolio)'s Opportunity Fund fourth quarter 2016 shareholder letter.

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Bill Ackman Comments on Valeant Pharmaceuticals International - Dec 09, 2016

Since our last update in August, Valeant (NYSE:VRX) has bolstered its management ranks, improved dermatology average selling prices (ASPs), stabilized its salesforces, and experienced acceleration in Salix script trends. Despite these positive developments, financial results continue to be challenged as certain unexpected events impacted Valeant in Q3 and weakness in Valeant’s U.S. Diversified Products segment continues to weigh on near- to medium-term earnings.

Valeant reported quarterly revenue of $2.48 billion, Adjusted EBITDA of $1.16 billion and Adjusted EPS of $1.55. This represented sequential improvement of 2%, 7% and 11%, respectively, as the business continues to stabilize following the disruption of recent quarters.

Beginning this quarter, management provided disclosure under the new financial reporting structure. The business is now aligned across three verticals: (1) Bausch + Lomb / International (“Durable”), (2) Branded Rx (“Growth”), and (3) U.S. Diversified Products (“Cash Generating”). This new disclosure is consistent with Valeant’s commitment to greater transparency. Over time, Valeant has indicated that a substantial mix-shift will take place in its business as Bausch + Lomb / International and Branded Rx target mid-single digit revenue growth (high-single digit operating income growth) while Valeant’s U.S. Diversified Products segment declines. As this mix-shift happens over time, a greater percentage of Valeant’s profits will come from higher quality, higher growth and more valuable businesses.

In conjunction with announcing Q3 results, management updated 2016 guidance, reducing full year estimates. Full year Adjusted EBITDA and EPS are now projected to be $4.25 billion to $4.35 billion (down from $4.8 billion - $4.95 billion) and $5.30 to $5.50, respectively (down from $6.60 to $7.00). Implicit in updated guidance is a sequential decline in Q4 versus Q3. Management addressed some of the key factors on the earnings call contributing to this dynamic, some of which are permanent headwinds while others are temporary.

Valeant management provided initial perspectives on 2017 results on the earnings call including an expectation for Bausch + Lomb / International and Branded Rx to achieve mid-single-digit revenue growth and high-single-digit operating profit growth. Management anticipates that this growth will be more than offset by the decline in U.S. Diversified Products (specifically the neurology and generics business) as a result of patent expirations and generic competition. Management announced the planned implementation of a zero-based-budgeting initiative, expected to save $75 to $100 million in 2017 and a goal to improve gross profit by $150 to $250 million by 2020 through supply chain rationalization.

Management reiterated its commitment to achieve more than $5 billion of debt reduction over the next 18 months from a combination of cash generation and asset divestitures. We believe that asset sales are an important catalyst for value creation and stock price appreciation at Valeant. Valeant has identified approximately $8 billion of assets that are non-core which it has begun to market for sale.

From Bill Ackman (Trades, Portfolio)'s Pershing Square third-quarter shareholder letter.

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Bill Ackman Comments on Valeant - Aug 29, 2016

At the time of our last financial report in March, Steve Fraidin and I had just joined the board of Valeant (NYSE:VRX) in an attempt to stabilize and enhance our investment in the company. Since we joined the board, the company has hired Joe Papa, an extremely capable and talented CEO, the substantial majority of the board has been replaced, the company has returned to filing its fmancial reports in a timely fashion, its bank debt has been successfully modified to substantially reduce the risk of covenant default, a highly credible and experienced CFO, Paul Herendeen, and General Counsel, Christina Ackermann, have joined the company, a new strategy and new fmancial reporting structure have been announced, and approximately $8 billion of assets are being evaluated for potential disposition.

As a result of the above developments, we believe that Valeant has been successfully stabilized and is on the path to recovery. While we still expect the occasional negative press article about the company due to the ongoing government investigations and civil litigation, continued business progress should begin to focus investors and the public's attention on the company's high quality brands and products and its mission to improve patients' lives. With improved business performance, cash generation and leverage reduction, we expect Valeant's stock price to increase substantially from current levels.

Valeant reported Adjusted EBITDA of $1.09 billion in the quarter and Adjusted EPS of $1.40. This represented sequential improvement vs. Q1 as the business continues to stabilize following the disruption from the events of the fall / winter of 2015.

Management reaffirmed full year 2016 guidance of $4.80 to $4.95 billion of Adjusted EBITDA and Adjusted EPS of $6.60 to $7.00. On the earnings call, management discussed some of the key factors which are likely to accelerate growth through the end of the year including: increased profitability in dermatology, an acceleration in script growth at Salix (principally Xifaxan), emerging markets growth, the launch of Relistor Oral and traditional seasonality in the business.

Management announced specific actions the company has taken in recent weeks to return the dermatology business to profitable growth, including progress in improving the Walgreens distribution arrangement (beginning August 5, 2016), the launch of a coupon program for independent pharmacies (June 27th), a new prior authorization program administered by CoverMyMeds (August 4, 2016) and enhanced pharmacist training and education. Each of these initiatives should help improve the profitability of the dermatology franchise which has been challenged in recent quarters. On the earnings call, management discussed a plan to reduce the cost structure in-line with the current revenue base driven by consolidation of duplicative functions, vendor rationalization and other efficiencies.

The company introduced a new financial reporting structure which will be rolled out later this year. The business will now be aligned across three verticals: (1) Bausch + Lomb / International ("Durable Growth"), (2) Branded Rx ("Growth") and (3) U.S. Diversified Products ("Cash Generating"). This new disclosure provides a more logical and informative description of Valeant's different businesses, which when coupled with greater disclosure, provides investors with a more complete understanding of Valeant's growth trajectory, business durability and quality. Because Valeant's higher quality growth businesses — which represent 80% of revenue — are expected to grow rapidly, while the company's lower quality businesses — which currently represent 20% of revenues — are declining, over time Valeant's overall growth rate and business quality and cash flow durability should improve. This should lead investors to pay a higher valuation for the company over time.

In conjunction with the new reorganization, Valeant announced promotions of current executives and the hiring of three new executives: Christina Ackermann (EVP, General Counsel), Scott Hirsch (SVP, Business Strategy and Communications) and Sam Eldessouky (SVP, Corporate Controller and Chief Accounting Officer). On August 22, 2016, Valeant announced that Paul Herendeen, previously the CFO of Zoetis, would become CFO of the company. We think Paul is a superb choice in light of his long-term track record as a public company CFO in the specialty pharmaceutical industry, including his experience in turnarounds, highly leveraged situations, and his recent tenure at Zoetis where he led a substantial cost reduction initiative. We were very impressed with the work Paul did at Zoetis and are delighted to be working with him at Valeant.

Management reiterated its expectation to substantially reduce leverage in the coming months. The company expects to reduce debt by more than $5 billion over the next 18 months funded primarily by cash flow and to a lesser extent by asset sales. Management announced that it had identified non-core assets which represent a transaction value of —$8 billion or 11 times EBITDA (based on comparable assets sales and/or unsolicited indications of interest) which are being evaluated for divestment. Valeant owns a large collection of highly marketable assets which, due to the highly acquisitive and well-capitalized nature of the pharma sector, should be able to achieve attractive transaction values in our view.

Lastly, management noted that while the company is projected to be in compliance with its financial maintenance covenants under the bank debt through 2016 at current guidance, the "cushion is not as large" as management would like it to be. As a result, the company has negotiated a favorable modification of its bank credit facilities to reduce EBITDA maintenance covenants and permit a greater amount of asset sales.

From Bill Ackman (Trades, Portfolio)'s mid-year 2016 letter.

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Top Ranked Articles about Valeant Pharmaceuticals International Inc

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Robert Bruce (Trades, Portfolio)’s firm, Bruce & Co., disclosed on Tuesday that it established a position in Apple Inc. (NASDAQ:AAPL) and boosted its position in several companies during the first quarter, including International Business Machines Corp. (NYSE:IBM) and Valeant Pharmaceuticals International Inc. (NYSE:VRX). Read more...
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Francis Chou (Trades, Portfolio), portfolio manager of Chou America Mutual Funds, disclosed he expanded his positions in Valeant Pharmaceuticals International Inc. (NYSE:VRX) and Endo International PLC (NASDAQ:ENDP) during the first quarter. Read more...
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Ratios

vs
industry
vs
history
Forward PE Ratio 6.50
VRX's Forward PE Ratio is ranked higher than
95% of the 111 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 20.00 vs. VRX: 6.50 )
Ranked among companies with meaningful Forward PE Ratio only.
N/A
PB Ratio 1.73
VRX's PB Ratio is ranked higher than
91% of the 843 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 2.96 vs. VRX: 1.73 )
Ranked among companies with meaningful PB Ratio only.
VRX' s PB Ratio Range Over the Past 10 Years
Min: 0.76  Med: 2.27 Max: 14.44
Current: 1.73
0.76
14.44
PS Ratio 0.91
VRX's PS Ratio is ranked higher than
91% of the 784 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 3.25 vs. VRX: 0.91 )
Ranked among companies with meaningful PS Ratio only.
VRX' s PS Ratio Range Over the Past 10 Years
Min: 0.32  Med: 3.43 Max: 10.51
Current: 0.91
0.32
10.51
Price-to-Free-Cash-Flow 5.02
VRX's Price-to-Free-Cash-Flow is ranked higher than
96% of the 216 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 26.03 vs. VRX: 5.02 )
Ranked among companies with meaningful Price-to-Free-Cash-Flow only.
VRX' s Price-to-Free-Cash-Flow Range Over the Past 10 Years
Min: 1.44  Med: 13.4 Max: 276.26
Current: 5.02
1.44
276.26
Price-to-Operating-Cash-Flow 4.42
VRX's Price-to-Operating-Cash-Flow is ranked higher than
96% of the 289 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 18.21 vs. VRX: 4.42 )
Ranked among companies with meaningful Price-to-Operating-Cash-Flow only.
VRX' s Price-to-Operating-Cash-Flow Range Over the Past 10 Years
Min: 1.22  Med: 10.85 Max: 48.3
Current: 4.42
1.22
48.3
EV-to-EBIT -13.67
VRX's EV-to-EBIT is ranked lower than
97% of the 599 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 19.78 vs. VRX: -13.67 )
Ranked among companies with meaningful EV-to-EBIT only.
VRX' s EV-to-EBIT Range Over the Past 10 Years
Min: -1211.6  Med: 14.8 Max: 379.5
Current: -13.67
-1211.6
379.5
EV-to-EBITDA 54.23
VRX's EV-to-EBITDA is ranked higher than
75% of the 623 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 16.59 vs. VRX: 54.23 )
Ranked among companies with meaningful EV-to-EBITDA only.
VRX' s EV-to-EBITDA Range Over the Past 10 Years
Min: 3.7  Med: 17.3 Max: 147.6
Current: 54.23
3.7
147.6
EV-to-Revenue 3.77
VRX's EV-to-Revenue is ranked higher than
50% of the 810 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 3.38 vs. VRX: 3.77 )
Ranked among companies with meaningful EV-to-Revenue only.
VRX' s EV-to-Revenue Range Over the Past 10 Years
Min: 1.3  Med: 5.9 Max: 14
Current: 3.77
1.3
14
Current Ratio 1.18
VRX's Current Ratio is ranked lower than
87% of the 772 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 2.56 vs. VRX: 1.18 )
Ranked among companies with meaningful Current Ratio only.
VRX' s Current Ratio Range Over the Past 10 Years
Min: 0.72  Med: 1.54 Max: 9.68
Current: 1.18
0.72
9.68
Quick Ratio 0.92
VRX's Quick Ratio is ranked lower than
83% of the 772 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 2.02 vs. VRX: 0.92 )
Ranked among companies with meaningful Quick Ratio only.
VRX' s Quick Ratio Range Over the Past 10 Years
Min: 0.59  Med: 1.19 Max: 9.3
Current: 0.92
0.59
9.3
Days Inventory 156.35
VRX's Days Inventory is ranked lower than
69% of the 765 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 116.78 vs. VRX: 156.35 )
Ranked among companies with meaningful Days Inventory only.
VRX' s Days Inventory Range Over the Past 10 Years
Min: 115.84  Med: 141.86 Max: 169.11
Current: 156.35
115.84
169.11
Days Sales Outstanding 82.99
VRX's Days Sales Outstanding is ranked lower than
59% of the 699 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 74.10 vs. VRX: 82.99 )
Ranked among companies with meaningful Days Sales Outstanding only.
VRX' s Days Sales Outstanding Range Over the Past 10 Years
Min: 43.41  Med: 87.02 Max: 106.05
Current: 82.99
43.41
106.05
Days Payable 62.45
VRX's Days Payable is ranked lower than
68% of the 640 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 73.92 vs. VRX: 62.45 )
Ranked among companies with meaningful Days Payable only.
VRX' s Days Payable Range Over the Past 10 Years
Min: 45.29  Med: 70.5 Max: 120.5
Current: 62.45
45.29
120.5

Buy Back

vs
industry
vs
history
3-Year Average Share Buyback Ratio -1.40
VRX's 3-Year Average Share Buyback Ratio is ranked higher than
67% of the 540 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: -4.80 vs. VRX: -1.40 )
Ranked among companies with meaningful 3-Year Average Share Buyback Ratio only.
VRX' s 3-Year Average Share Buyback Ratio Range Over the Past 10 Years
Min: -34.7  Med: -2.7 Max: 14
Current: -1.4
-34.7
14

Valuation & Return

vs
industry
vs
history
Price-to-Intrinsic-Value-Projected-FCF 0.31
VRX's Price-to-Intrinsic-Value-Projected-FCF is ranked higher than
98% of the 312 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 2.58 vs. VRX: 0.31 )
Ranked among companies with meaningful Price-to-Intrinsic-Value-Projected-FCF only.
VRX' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.18  Med: 1.17 Max: 11.22
Current: 0.31
0.18
11.22
Price-to-Median-PS-Value 0.26
VRX's Price-to-Median-PS-Value is ranked higher than
98% of the 692 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 1.08 vs. VRX: 0.26 )
Ranked among companies with meaningful Price-to-Median-PS-Value only.
VRX' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.12  Med: 1.61 Max: 6.3
Current: 0.26
0.12
6.3
Earnings Yield (Greenblatt) % -7.31
VRX's Earnings Yield (Greenblatt) % is ranked lower than
65% of the 888 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 2.96 vs. VRX: -7.31 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) % only.
VRX' s Earnings Yield (Greenblatt) % Range Over the Past 10 Years
Min: -7.9  Med: 1.6 Max: 21.6
Current: -7.31
-7.9
21.6
Forward Rate of Return (Yacktman) % 31.85
VRX's Forward Rate of Return (Yacktman) % is ranked higher than
98% of the 414 Companies
in the Global Drug Manufacturers - Specialty & Generic industry.

( Industry Median: 9.53 vs. VRX: 31.85 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) % only.
VRX' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -18  Med: 19.1 Max: 81.2
Current: 31.85
-18
81.2

More Statistics

Revenue (TTM) (Mil) $8,610.00
EPS (TTM) $ -2.65
Beta-0.98
Volatility78.95%
52-Week Range $10.94 - 24.43
Shares Outstanding (Mil)349.30

Analyst Estimate

Dec18 Dec19 Dec20
Revenue (Mil $) 8,302 8,446 8,726
EBIT (Mil $)
EBITDA (Mil $)
EPS ($) 3.54 3.81 4.34
EPS without NRI ($) 3.54 3.81 4.34
EPS Growth Rate
(Future 3Y To 5Y Estimate)
N/A
Dividends per Share ($)

Piotroski F-Score Details

Piotroski F-Score: 44
Positive ROAN
Positive CFROAY
Higher ROA yoyY
CFROA > ROAY
Lower Leverage yoyN
Higher Current Ratio yoyN
Less Shares Outstanding yoyN
Higher Gross Margin yoyN
Higher Asset Turnover yoyY

Personalized Checklist

Checklist has been moved to "Checklist" tab.

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