Air Methods has been rated a buy since June 2006, based on a few notable strengths. The company reported very impressive revenue growth of 58.3% year over year in the fourth quarter of fiscal 2007. A large portion of the revenue increase was attributed to revenue generated from bases added as a result of the acquisition of the parent company of CJ Systems Aviation Group (CJ) in October 2007.
Air Methods also reported significant earnings per share improvement, with EPS rising to 38 cents from 10 cents a year ago. Net income increased by 301.6%, rising from $1.20 million in the fourth quarter of fiscal 2006 to $4.82 million.
Weather conditions during the early months of fiscal 2008 have impacted transport volume, but management remains optimistic that the company will achieve healthy earnings growth throughout the year. However, Air Methods' future results could be negatively impacted by any failure to fully integrate CJ into the company's operations.
Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks.
However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.
For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.