Rating Change #3
Life Technologies Corp (LIFE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.6%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- LIFE TECHNOLOGIES CORP's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LIFE TECHNOLOGIES CORP increased its bottom line by earning $1.99 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $1.99).
- The gross profit margin for LIFE TECHNOLOGIES CORP is rather high; currently it is at 69.30%. Regardless of LIFE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.40% trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.60, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.90 is weak.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, LIFE TECHNOLOGIES CORP's return on equity is below that of both the industry average and the S&P 500.
Life Technologies Corporation operates as a life sciences company with a focus on improving the human condition worldwide. The company has a P/E ratio of 24.8, equal to the average health services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Life has a market cap of $8.43 billion and is part of the health care sector and health services industry. Shares are up 26.2% year to date as of the close of trading on Thursday.You can view the full Life Ratings Report or get investment ideas from our investment research center.