Euroapi, a French pharmaceutical company, experienced a significant decline in its share price on Tuesday, marking the worst one-day percentage drop since the company began trading last year. The stock plunged to an all-time low of €5.20, even touching €4.70 during the day. According to InvestingPro data, the company's 1-week price total return was -3.81%, and the 1-month price total return stood at -17.91%, reflecting the recent downturn in the company's stock performance.
This sharp fall was sparked by Euroapi's recently revised financial outlook. The company has reduced its sales growth forecast for 2023 to between 3-5%, a notable decrease from the previously projected 7-8%. This aligns with one of the InvestingPro Tips, which notes that Euroapi's revenue has been declining at an accelerating rate. Furthermore, Euroapi has suspended its medium-term targets until 2026.
In addition to the revised sales growth forecast, the firm also expects its core EBITDA margin to contract to between 9-11%, compared to the initial range of 12.5-13.5%. Analysts at JPMorgan (NYSE:JPM) suggest that these adjustments could lead Euroapi's core EBITDA for 2024 to be approximately 37% below consensus estimates. This is in line with another InvestingPro Tip, which predicts that Euroapi's net income is expected to drop this year.
The company has attributed this anticipated slowdown in revenue to changes in the market environment. In response, Euroapi is initiating a strategic review with the aim of adapting its operating model to better navigate these changes. Interestingly, despite the challenging market conditions, InvestingPro Tips indicate that Euroapi operates with a high return on assets and stockholders receive high returns on book equity. For more insights like these, consider checking out InvestingPro's premium services, which offer numerous additional tips.
In terms of real-time metrics, Euroapi's market capitalization, adjusted for recent market changes, stands at $0.51 million, and the price at the previous close was $0.02. The company's average daily volume over the past three months is $0.01 million. All this data points to a challenging period for Euroapi, but with strategic adjustments, the company aims to navigate these headwinds effectively.
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