Prestige Consumer PBH has witnessed strong momentum in the past year. Shares of the company have risen 17.1% compared with 7.1% growth of the industry during the same time frame. The S&P 500 composite has increased 10.5%.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.

Prestige Consumer develops, manufactures, markets, sells and distributes over-the-counter (OTC) healthcare and household cleaning products in the United States, Canada, Australia and certain other international markets. Also, it operates through the e-commerce channel.

The company reports operating results under two segments — North American OTC Healthcare and International OTC Healthcare. Some of the major brands under North American and International OTC Healthcare are BC and Goody's, Chloraseptic, Compound W, Debrox, Dramamine, Fess, Fleet, Hydralyte, Monistat, Nix and Summer's Eve, among others. 

Factors Favoring PBH’s Share Price Growth

Prestige Consumer’s share price is trending upward, prompted by its diverse portfolio of well-recognized consumer brands. The company’s core brands together generated nearly 58.6% of the total revenues in fiscal 2024. Its gastrointestinal (GI) product category represents almost one-fifth of all North American sales. 

The Eye & Ear Care category consists of a wide range of leading brands. Furthermore, PBH is experiencing impressive growth in the e-commerce channel, continuing its long-term trend of increasing online purchases. This optimism, driven by a solid fiscal 2025 third-quarter performance and increasing revenues from all reportable business segments, is expected to contribute further.

Investors showed optimism about Prestige Consumer’s strategic acquisitions. The company acquired Hydralyte (an over-the-counter oral rehydration brand in Australia) from the Hydration Pharmaceuticals Trust of Victoria, Australia. 

PBH’s emphasis on brand building and product innovation looks encouraging. The long-term brand-building initiatives, combined with efficient marketing, channel development and innovative approaches, have enabled its brands to consistently maintain a leading market share position. 

The company’s iconic franchise, Dramamine within GI, has been successfully using numerous brand-building tactics to grow with consumers. The most recent innovation includes Dramamine Advanced Herbals, which features ingredients specifically designed to help consumers manage nausea and stress. 

Another one within GI is the Fleet brand, a clear market leader with a 100-plus-year history since its creation. Currently, this brand holds over 50% share of the rectal laxative category. It is currently focusing on expanding into adjacent categories, such as oral laxatives. Further, Prestige Consumer is making progress in its women's health franchise, which is represented by two distinct leading market share brands — Monistat and Summers Eve.

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Factors That May Offset PODD’s Gains

In the past few years, global economic conditions have been volatile due to factors like supply-chain constraints, rising interest rates, a high inflationary environment and geopolitical events. As a result, in the first nine months of fiscal 2025, the net gross margin was down slightly year over year. Additionally, general and administrative expenses were up 9.6% from the year-ago period’s level. 

Furthermore, fluctuating foreign exchange rates remain a concern for Prestige Consumer, as it generates a substantial amount of its total revenues from international business. This could result in unfavorable price increases for the company’s products or lead to higher costs for certain products purchased from its foreign third-party manufacturers.

A Look at PBH’s Estimates

The Zacks Consensus Estimate for fiscal 2025 EPS has moved north 0.4% to $4.52 in the past 30 days.

Prestige Consumer has an earnings yield of 5.3% compared with the industry’s 0.3%. 

Stocks to Consider

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Masimo MASI and Cardinal Health CAH.

Phibro Animal Health has an earnings yield of 8.2%, well ahead of the industry’s 1.2%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. Its shares have surged 45.3% against the industry’s 2.2% decline in the past year.

PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo, presently carrying a Zacks Rank #1, has an earnings yield of 2.5%, well ahead of the industry’s -3.6%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.4%. Its shares have surged 45.3% against the industry’s 2.2% decline in the past year.

Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.4%. Shares of the company have rallied 12.1% against the industry’s 2.3% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

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This article originally published on Zacks Investment Research (zacks.com).

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