It has been a great week for embattled healthcare firm Valeant Pharmaceuticals Intl Inc (NYSE:VRX). On Monday, it announced the results of paying down some debt ahead of schedule. On Tuesday, it held its annual shareholder meeting and provided the market with some needed clarity on what it hopes the future holds for investors. As a result, VRX stock has jumped by double digits in just two days, and is on track to tack on even more gains Wednesday morning.

Valeant believes it stabilized its business last year, and will be in turnaround mode for the next two years. Its stabilization included a new management team, paying down debt, and defining new business segments to help it better track its businesses.

The question is: Will the way forward result in continued gains for VRX stock?

The Turnaround Plan

The next two years are expected to include more of the same: paying down more debt, growing sales again and cutting costs. Then, Valeant hopes to return to growth mode both by buying rivals and growing its existing businesses organically.

Valeant has held to its goal of paying down $5 billion in debt from selling off businesses and assets, and from the cash flow it generates from the remaining businesses. It gave this goal in August 2016 and said it wanted to do this within 18 months, so has about 10 months left to achieve it. On Monday, it announced it paid down $220 million of debt faster than expected, sparking the initial run in VRX stock.

The debt reduction stemmed from selling three skincare brands to L’Oréal SA (ADR) (OTCMKTS:LRLCY) ahead of schedule. Nine other divestitures are currently in the works and include Dendreon, Ruconest, Delta and Paragon. Total proceeds (including L’Oréal) could reach $2.7 billion and would cover liquidity into the year 2020.

On the growth front, Valeant plans 50 product launches this year and expects $100 million in revenue from the new related business. Late-phase development includes SAN-300 to treat rheumatoid arthritis, IDP-220 to treat acne, and IDP-123 to combat psoriasis. These could fit in well with its Bausch + Lomb franchise and a number of steady selling drugs and consumer-related drug products.

In a recent earnings presentation, VRX also detailed 135 active R&D programs.

Valeant does have some customer concentration. Its largest customers include the three largest drug distributors, which sell drugs to end customers including hospitals, drug retailers and doctors. McKesson Corporation (NYSE:MCK), Cardinal Health Inc (NYSE:CAH) and AmerisourceBergen Corp (NYSE:ABC) collectively made up half of last year’s sales.

Bottom Line on VRX Stock

Valeant shares started the week at $9.24 per share, then rallied to $10.31 by the end of the day on Tuesday. I know $1.07 doesn’t sound like much, but it represents an 11.6% stock jump in just a couple of days.

Despite the recent run, there appears to be more value in VRX stock.

Last year, Valeant Pharmaceuticals reported $5.20 in free cash flow per share and $6.01 the previous year. Of course, businesses are being sold, so it is difficult to say for certain what the cash flow generation will be when the dust settles.

It would have been nice if management provided more clarity on its cash flow situation during its annual update, as well as Valeant’s ability to stay in compliance with its debt covenants. All it stated during its annual meeting was that “we expect to remain in compliance with our credit agreement financial maintenance covenants throughout 2017.”

Overall, its annual meeting slides were brief, and not much new came out of it. A recent article in the Wall Street Journal detailed that the vast majority of debt maturities occur between 2020 and 2024. This suggests Valeant has plenty of time to take care of any excessive debt concerns.

Even if free cash flow comes in at half of last year’s levels, though, VRX stock could more than double in value.

More risk-averse investors might sleep better owning pharma stocks including Pfizer Inc. (NYSE:PFE) and Merck & Co, Inc. (NYSE:MRK), which offer a better mix of reasonable valuations, above-average dividend yields, and more predictable earnings growth.

As of this writing, Ryan Fuhrmann did not hold a position in any of the aforementioned securities.