What Happened?
Shares of pharmaceutical company Amphastar Pharmaceuticals (NASDAQAMPH) fell 15.8% in the afternoon session after the company reported fourth-quarter 2025 financial results that fell short of Wall Street's expectations on both revenue and profit.
Revenue for the quarter came in at $183.1 million, a 1.8% decline year-on-year that missed analyst forecasts. The company's adjusted earnings per share of $0.73 also fell short of consensus estimates and was down from $0.92 in the same quarter last year. Adding to the concerns, Amphastar's operating margin contracted to 19.4% from 24.2% in the prior-year period, indicating a decline in profitability as its expenses increased relative to revenue. Overall, the results showed slowing growth and weakening profitability, which disappointed investors.
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What Is The Market Telling Us
Amphastar Pharmaceuticals’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Amphastar Pharmaceuticals and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 4.7% on the news that a softer-than-expected inflation report fueled hopes for interest rate cuts by the Federal Reserve. The January Consumer Price Index (CPI), a key measure of inflation, rose by 0.2%, which was less than economists had forecast, with the annual rate cooling to 2.4%. This encouraging data increased market expectations for the Fed to begin cutting interest rates as early as June. The news prompted a rally in Treasuries as their yields fell. While the market's reaction was initially described as a "bumpy ride" due to concerns in other sectors, the favorable inflation data ultimately helped calm Wall Street. Lower inflation is a key prerequisite for the central bank to ease its monetary policy, which is generally supportive of stock valuations.
Amphastar Pharmaceuticals is down 15.9% since the beginning of the year, and at $22.26 per share, it is trading 29.3% below its 52-week high of $31.49 from February 2025. Investors who bought $1,000 worth of Amphastar Pharmaceuticals’s shares 5 years ago would now be looking at an investment worth $1,274.
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