Shares of Teva Pharmaceutical (TEVA 8.31%) are surging on Wednesday. The company's stock is up 9.2% as of 1:15 p.m. ET and was up as much as 9.5% earlier in the day. The leg up comes as the S&P 500 is up 0.4% and the Nasdaq Composite is losing 0.1% on the day so far.

The Israel-based pharmaceutical company reported strong Q1 earnings today and raised its full-year profit guidance.

Earnings beat despite revenue miss

Teva reported Q1 adjusted earnings per share (EPS) of $0.52, solidly beating Wall Street's target of $0.48. The company missed on sales, however, reporting $3.89 billion for the quarter when $4 billion was expected.

Still, the company's margins are expanding, reaching 48.2% in the quarter, compared to 46.4% a year ago. The company pointed to higher-margin specialty drugs representing a larger portion of overall sales this quarter.

One of these drugs, Austedo, which is used to treat movement disorders, continued its strong performance with worldwide revenue of $411 for the quarter, up 39%, compared to the same period last year.

Image source: Getty Images

Teva raises guidance

Teva raised its fiscal 2025 adjusted EPS guidance from a range of $2.35 to $2.65 to a new range of $2.45 to $2.65. The new midpoint exceeds the consensus estimate of $2.55.

CEO Richard Francis emphasized that Teva is now entering the "Acceleration Phase" of its "Pivot to Growth Strategy." "We're accelerating innovative growth and strengthening our generics business, while streamlining our operations, sharpening our business, and optimizing processes," Francis stated. These efficiency measures, combined with the company's product growth, appear to be resonating with investors.

The company appears to be delivering on its growth plan. Considering its reasonable valuation, I think the stock is a good pick.