Normally when a stock beats earnings Wall Street does a golf clap, and the stock goes up - even if slightly.

Not so with Valeant Pharmaceuticals on Tuesday. The company reported adjusted earnings that beat Wall Street's expectations at $1.26 per share. The Street was calling for $1.24 a share.

Yet, the stock fell immediately upon the announcement of this earnings beat, dipping around 6% in premarket trading. Wall Street, in an arguably rare move, is being forced to look beyond headline numbers and is digging into once of the ugliest business stories since the financial crisis. It's now down around 10%.

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Keeping the faith

In the summer of 2015, Valeant's stock was soaring around $267 and had the full faith and support of one of Wall Street's titans, hedge fund billionaire Bill Ackman. In a few short months, though, accusations of accounting malfeasance and scrutiny from the federal government over its drug pricing practices virtually destroyed the company. Its stock is now hovering $16.

2016 was a roller coaster of more federal investigations, a new CEO, Congressional hearings, and nation-wide anger over Valeant's drug price hikes. All the while the company was still holding $30 billion in debt and a product line that had expanded through acquisitions it no longer had the cash to continue.

Ackman, however, kept his faith in the company and encouraged Wall Street to do the same.

But it doesn't seem to be working. Quarter after quarter executives said they were turning the corner to a "new Valeant." Quarter after quarter the "new Valeant" was pushed back to later and later. Now, based on the company's most recent call, it seems it won't arrive until sometime around mid 2018.

2017, they say, will be treacherous.

Losing the faith

Valeant

Key goals remain unmet. For example, the company is committed to raising $5 billion in cash to pay down debt and continue operations. So far, it's in talks to sell two assets for a total of $2.1 billion. It's still looking for assets to sell that won't cut too deeply into the company's product line and profitability.

Meanwhile, a number of Valeant's drugs will lose their exclusivity this year, and the company estimates that will create a growth drag on revenue of about $785 million.

"The realities of our capital structure force us to invest less in R&D," Valeant executives said on their call.

That is why the company has found some "hidden gems" - old drugs that it can relaunch for extra revenue. This should raise a red flag for anyone watching the debate about drug pricing and sales. The Feds are angry about companies finding old drugs and jacking up the prices, or aggressively pushing drugs with cheaper generic competitors. Valeant has done this before, and the Feds are watching them for it.

Executives also said they planned to relaunch Addyi, a female sexual enhancement drug that, frankly, isn't proven to work very well.

So the stock is down. People aren't buying this recovery plan. And it seems Wall Street is losing the faith.

Irinia Koffler, and analyst over at Mizuho and former Valeant bull, has a price target of $9 on the stock now. Her sum of the parts (SOTP) valuation of the business puts it at $16 a share. Back in August her SOTP generated a $25 stock price.

And back in November of 2015, right after Valeant first started bleeding, Koffler said a fire-sale would produce a stock price of $100 a share.

Life comes at you fast.