3 need-to-know financial trends in the animal health market

In the competitive world of the animal health market, it is of vital importance that industry professionals understand market trends and their impact on various aspects of business. With a number of factors to break down, different facets of the industry are affected in unique ways, especially when it comes to investing and seeking investment. Here are three key takeaways from the past few years and how to use them to your advantage.

1. Overall: Animal health is flourishing

Recent developments suggest there’s been a rebound in the animal health industry, with it outpacing the broader market through the second quarter. The last time we saw a similar trend was in 2020 during the pandemic. Performance increased due to the high demand for animal health products before consumer chaos subsided. Its current resurgence can be attributed partially to stabilizing economic conditions. The animal health industry's performance presents a positive outlook for growth and profitability. On the flip side, it brings attention to the need for continued adaptation and innovation to keep up the momentum.

2. Investors: This looks like a great time to invest

A few years ago, some animal health companies were trading at a premium based on excitement around the industry. The companies reaped rewards as investors put down money based on the increased expectations. Since the pandemic boom, valuations have dropped and are now lower and more in-line with historical valuations. In general, investors in animal health companies value profitability higher than growth. Never fear: We believe the animal health market appears to be a smart investment, especially for those who follow the fundamentals of backing well-run, operationally efficient companies.

3. Startups: Focus on profitability over growth

While both growth and profitability drive value, profitability has been worth more over the past five or six years—and that doesn’t look to be changing any time soon. At this point in the animal health market, early-stage companies courting investors must focus on generating revenue and showcasing a plan toward profitably. Demonstrating efficient operations will be attractive to investors.

The animal health market is dynamic, and staying on top of it means diligently following trends. To get the latest on performance and projections and how they’ll affect you, join me at the 2023 Animal Health Summit hosted by the Kansas City Animal Health Corridor. My presentation, Animal Health Trends, Transactions and Valuations, will take place on Tuesday, Aug. 29. Seats are limited, so register today.

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