Investing in Perrigo (PRGO)? Don't Miss Assessing Its International Revenue Trends

Zacks Equity Research

Wed, Mar 5, 2025, 7:15 AM 4 min read

Have you looked into how Perrigo (PRGO) performed internationally during the quarter ending December 2024? Considering the widespread global presence of this drug company, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

While delving into PRGO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The recent quarter saw the company's total revenue reaching $1.14 billion, marking a decline of 1.6% from the prior-year quarter. Next, we'll examine the breakdown of PRGO's revenue from abroad to comprehend the significance of its international presence.

Unveiling Trends in PRGO's International Revenues

All other countries accounted for 2.37% of the company's total revenue during the quarter, translating to $27 million. Revenues from this region represented a surprise of -33.11%, with Wall Street analysts collectively expecting $40.37 million. When compared to the preceding quarter and the same quarter in the previous year, All other countries contributed $33.3 million (3.06%) and $26.5 million (2.29%) to the total revenue, respectively.

During the quarter, Europe contributed $379.1 million in revenue, making up 33.30% of the total revenue. When compared to the consensus estimate of $419.08 million, this meant a surprise of -9.54%. Looking back, Europe contributed $397.3 million, or 36.53%, in the previous quarter, and $389.9 million, or 33.70%, in the same quarter of the previous year.

International Revenue Predictions

Wall Street analysts expect Perrigo to report $1.11 billion in total revenue for the current fiscal quarter, indicating an increase of 2.3% from the year-ago quarter. All other countries and Europe are expected to contribute 3.4% ($38.07 million) and 35.7% ($395.74 million) to the total revenue, respectively.

Analysts expect the company to report a total annual revenue of $4.42 billion for the full year, marking an increase of 1.1% compared to last year. The expected revenue contributions from All other countries and Europe are projected to be 3.5% ($154.52 million) and 36.1% ($1.6 billion) of the total revenue, in that order.

Key Takeaways

Relying on international markets for revenues, Perrigo faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.

Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Currently, Perrigo holds a Zacks Rank #4 (Sell), signifying its potential to underperform the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Assessing Perrigo's Stock Price Movement in Recent Times

The stock has witnessed an increase of 16.7% over the past month versus the Zacks S&P 500 composite's a decrease of 4.1%. In the same interval, the Zacks Medical sector, to which Perrigo belongs, has registered an increase of 0.4%. Over the past three months, the company's shares saw an increase of 6.2%, while the S&P 500 declined by 4.7%. In comparison, the sector experienced a decline of 2.1% during this timeframe.

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

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