Taro Pharmaceuticals Stock Forecast: Research and Development will Ensure TARO will keep on Growing

TARO Stock Forecast


  • Impressive results: 30.5% surge in Taro’s net sales and 70% net profit growth in March 2015.
  • R&D is still the center department of the firm which is a positive signal for Taro future. 
  • I Know First has a bullish view regarding TARO stock.

Founded in 1959, Taro Pharmaceutical Company (TARO) share prices have increased significantly over the past few years. It was valued 5 years ago around $10 and went over $160 at the beginning of the year. Since then, it has decreased to approximately $135. Nevertheless, there are quite a few indicators that TARO current dip is only small blip and the stock will rise again in the near future.

TARO stock forecast

(Figure 1. TARO Stock – Source: Yahoo Finance)

Quarterly Results Much Better Than Expected

Taro Industries sells healthcare products, used chiefly for dermatology, cardiology, pediatrics and neurology and sales have exploded during the first quarter. Compared to last year, sales have surged by 30.5% from $244 million to $187 million. Quite impressively, Taro notched up net profit of $153 million compared to $90 million in the same period last year – obtaining a net profit growth of 70%. Taro’s continuous focus on expanding their company further through research and development means that these fantastic results are not necessarily going to be ephemeral and the company plan on maintaining these profit margins into the future.


Research & Development is a key part of Taro. The company asserts that “R&D would be the cornerstone of its growth strategy” and this assertion is reflected by the amount the company spent on expenditure. As of March 2015, annual R&D expenditures increased by 18.2% from $55.4 million to $65.5 million.

Research and Development is essential for any pharmaceutical company. Developing new and innovative products is an absolute necessity in order to stay competitive in the pharmaceutical market. The fact that Taro understands and is investing heavily in R&D bodes well for the company and their shareholders.

TARO stock forecast

Figure 2. Pharmaceutical Lab

Analyst Opinion

The consensus amongst analysis is that TARO is currently a safe stock to buy and have consistently labeled it as a recommended stock to buy over the past few weeks.

Analysts believe that, in the long-term, TARO will ultimately carry on growing as it has been doing over the past five years and have confirmed this with a mean recommendation value of 2.0.

TARO stock forecast

(Figure 3. Analysts’ recommendations – Source: Yahoo Finance)



Taro Pharmaceuticals, mainly based in Canada, USA, and Israel, has tremendous potential to grow further thanks to continuous investment in Research and Development. Developing new innovative products as a result of its R&D indicates that the company will continue to report impressive quarterly results in the years ahead.

Algorithmic Analysis

I Know First supplies financial services, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database, and utilizes it to predict the flow of money across 2000 markets. The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

The algorithm produces a forecast with a signal and a predictability indicator. The signal is the number in the middle of the box. The predictability is the number at the bottom of the box. At the top, a specific asset is identified. This format is consistent across all predictions. The middle number is indicative of strength and direction, not a price target. The bottom number, the predictability, signifies a confidence level.

Having explained how I Know First’s algorithm works, it is worthwhile to see if the algorithm agrees with the bullish fundamental analysis of the company. Taro Pharmaceuticals Stock Forecast

(Figure 1: TARO Forecast 29 July ’15)

The above forecast is the most-recent forecast from July 29th 2015 and is for the long-term periods of one-month, three-months and one-year. The forecast for TARO starts off moderately bullish, with a somewhat weak signal strength of 7,99 and predictability of 0.21. As time progresses the algorithm has a more bullish vision for the stock attributing it with a more stronger signal of 35.84 for the three month forecast and giving a highly bullish signal of 169.51 for the one-year time frame. For the one-year time frame, TARO has the fifth strongest signal in its category.

The algorithm correlates with the fundamental analysis where the general consensus is that via continuously expanding their research and development and posting great quarterly results, TARO shares will inevitably rise further – particularly in the long term. Taro Pharmaceutical’s current share price blip therefore creates an opportunity to investors with lots of upside potential.