The A2 Milk Company Ltd (ASX: A2M) share price is down 0.71% today to $5.56 at the time of writing.
That's a superior performance to the S&P/ASX All Ordinaries Index (ASX: XAO), which is down 1.5%.
A2 Milk share investors have had a rocky few years. In fact, they've been terrible years. This is an ASX share that has been truly relegated to the doghouse over the pandemic period.
Let's take a look at recent history.
Image source: Getty Images
The A2 Milk share price plunge
Back in July 2020, the A2 Milk share price was at an all-time high of $20.05. Since then, it has fallen 72%.
No one said the buy-and-hold strategy is easy.
To be fair, investors who bought in at the time of the initial public offering (IPO) in 2015 have still made a bundle. A total of 895%, to be precise (incorporating that painful 72% fall in recent years).
As my Fool colleague Sebastian points out, A2 Milk was once considered a market darling. In fact, it was viewed as an ASX growth share.
Between April 2015 and April 2018, the A2 Milk share price rose by an astounding 2,000%. After this honeymoon period, it experienced some volatility but continued to move up gradually until July 2020.
And then came the impact of the COVID-19 pandemic, which had a profound effect on A2 Milk's daigou channel.
Are things turning around?
A2 Milk's FY22 full-year results revealed revenue and earnings about 5% above consensus expectations.
The company reported a 59% lift in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$196.2 million. Its net profit after tax (NPAT) was up 42.3% to NZ$114.7 million.
A2 Milk told the market it expected high single-digit revenue growth in FY23.
What do the experts think?
In a recent webinar, equity analyst Anna Milne from WAM Leaders Ltd (ASX: WLE) was positive on A2 Milk.
Milne said:
So the CEO has made a lot of brave decisions recently to try and turn A2 around, and green shoots are starting to appear.
The daigou channel is now economical and they have price and margin, and it's just one of these defensive names that has been in the doghouse. So we do like A2 Milk.
Leading fund manager Perpetual Equity Investment Company (ASX: PIC) is on the same page as Milne. The fundie sees "material upside" to the current A2 Milk share price, as my colleague Bruce reported.
In Perpetual equity's August update, it noted that the most pleasing aspect of A2 Milk's results was the strong growth of the China Label infant formula business. Despite a significantly lower birth rate in China, A2 Milk's infant formula business had revenue growth of 40%.
Finally, Bell Potter has retained its buy rating and lifted the share price target on A2 Milk to $6.60.
As my Fool friend James reported, Bell Potter was impressed that A2 Milk's Australia-China exports were up 111% year over year in July — the "strongest read in nine months" — and China infant formula imports were up 31%.
