Alexion Pharmaceuticals Inc. Stock Buy Recommendation Reiterated (ALXN)

NEW YORK (TheStreet) -- Alexion Pharmaceuticals (Nasdaq:ALXN) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . 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, solid stock price performance, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:

• The revenue growth greatly exceeded the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 47.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
• ALXN's debt-to-equity ratio is very low at 0.13 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 2.90, which clearly demonstrates the ability to cover short-term cash needs.
• ALEXION PHARMACEUTICALS INC reported flat earnings per share in the most recent quarter. 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, ALEXION PHARMACEUTICALS INC increased its bottom line by earning $0.91 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $0.91).
• Compared to its closing price of one year ago, ALXN's share price has jumped by 83.95%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
• The gross profit margin for ALEXION PHARMACEUTICALS INC is currently very high, coming in at 88.50%. Regardless of ALXN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALXN's net profit margin of 13.20% is significantly lower than the same period one year prior.

 

Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of biologic therapeutic products in the United States, Europe, Latin America, Japan, and the Asia Pacific.The company has a P/E ratio of 103.8, below the average drugs industry P/E ratio of 104.9and above the S&P 500 P/E ratio of 17.7.Alexion has a market cap of $20.24 billion and is part of the health care sector and drugs industry.Shares are up 46.6% year to date as of the close of trading on Wednesday.

You can view the full Alexion Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on Alexion Pharmaceuticals Inc. click any of the following:

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• Alexion Pharmaceuticals Inc. Key Stats & Profile

• Alexion Pharmaceuticals Inc. Earnings

• Alexion Pharmaceuticals Inc. Ratio Comparison

• Alexion Pharmaceuticals Inc. Growth Rates

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• Alexion Pharmaceuticals Inc. Cash Flow

• Alexion Pharmaceuticals Inc. Income Statement