Rating Change #4
Health Management Associates Incorporated (HMA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally poor debt management.
Highlights from the ratings report include:
- The gross profit margin for HEALTH MANAGEMENT ASSOC is currently extremely low, coming in at 15.00%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.90% is above that of the industry average.
- The debt-to-equity ratio is very high at 5.02 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, HMA has managed to keep a strong quick ratio of 1.85, which demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the Health Care Providers & Services industry average, but is less than that of the S&P 500. The net income increased by 18.3% when compared to the same quarter one year prior, going from $46.94 million to $55.52 million.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- HMA's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 12.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
Health Management Associates, Inc., through its subsidiaries, engages in the operation of general acute care hospitals and other health care facilities in non-urban communities in the United States. The company has a P/E ratio of 15.5, below the average health services industry P/E ratio of 16.7 and below the S&P 500 P/E ratio of 17.7. Health Management Associates has a market cap of $2.7 billion and is part of the health care sector and health services industry. Shares are up 9.9% year to date as of the close of trading on Wednesday.You can view the full Health Management Associates Ratings Report or get investment ideas from our investment research center.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV