NEW YORK (TheStreet) -- Concord Medical Services Holdings (NYSE:CCM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 33.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CCM's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.07, which clearly 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 S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 19.8% when compared to the same quarter one year prior, going from $5.00 million to $5.98 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Health Care Providers & Services industry and the overall market, CONCORD MEDICAL SVCS -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- CCM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.50%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
-- Written by a member of TheStreet RatingsStaff
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