What happened

Shares of Bausch Health Companies (BHC -4.24%) gained a healthy 13.7% over the course of November, according to data from S&P Global Market Intelligence.

What triggered this double-digit rally? On Nov. 4, Bausch released a better-than-expected third-quarter earnings report. The drugmaker, in fact, topped Wall Street's consensus estimates for both its bottom and top lines for the three-month period.

A road sign that reads change just ahead.

Image Source: Getty Images.

So what

Adding fuel to the fire, Bausch gave investors two additional reasons to be optimistic about its ongoing turnaround story:

  1. The company's newly launched dermatology med Duobrii has gotten off to a red-hot start, despite facing significant competition in the marketplace. Wall Street, in turn, has started to float the idea that Bausch may have the next megablockbuster psoriasis treatment on its hands.
  2. Bausch's controversial acquisition of the constipation med Trulance is already starting to pay dividends. Even though Trulance effectively caused the demise of its former manufacturer, Synergy Pharmaceuticals, Bausch has so far had a markedly different experience with the drug since taking over its launch earlier this year. Matter of fact, Trulance appears to be well on its way toward becoming a key growth driver for the company in the years ahead.

Now what

Is Bausch still a buy after last month's sizable rally? From a fundamental standpoint, there's a strong case to be made that Bausch is still in bargain territory. Even though the drugmaker's shares have gained a stately 54% year to date, its stock is only trading at 1.13 times next year's estimated revenue. That's dirt cheap for a mid-cap biopharma stock.

The flip side of the coin is that Bausch remains mired in debt and it could take years to complete the deleveraging process. During this raging bull market, investors haven't seemed to care all that much about this fundamental issue. But the situation could change if sentiment toward biopharmas flip-flops yet again.

Bottom line: Bausch's stock is arguably a worthwhile buy at these levels. The company seems to have a burgeoning star with Duobrii, and Trulance may turn out to be a diamond in the rough as well.