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Meridian Bioscience Inc. Stock Downgraded (VIVO)

Editor's Note: 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

NEW YORK ( TheStreet) -- Meridian Bioscience (Nasdaq: VIVO) 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, notable return on equity and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, MERIDIAN BIOSCIENCE INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • MERIDIAN BIOSCIENCE INC has improved earnings per share by 23.5% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, MERIDIAN BIOSCIENCE INC's EPS of $0.66 remained unchanged from the prior years' EPS of $0.66. This year, the market expects an improvement in earnings ($0.80 versus $0.66).
  • The gross profit margin for MERIDIAN BIOSCIENCE INC is rather high; currently it is at 65.60%. Regardless of VIVO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VIVO's net profit margin of 20.40% compares favorably to the industry average.

Meridian Bioscience, Inc., a life science company, engages in the development, manufacture, sale, and distribution of diagnostic test kits primarily for gastrointestinal, foodborne, viral, respiratory, and parasitic infectious diseases. The company's diagnostic products primarily consist of C. The company has a P/E ratio of 22.8, above the average drugs industry P/E ratio of 22.2 and above the S&P 500 P/E ratio of 17.7. Meridian Bioscience has a market cap of $697.3 million and is part of the health care sector and drugs industry. Shares are down 3.1% year to date as of the close of trading on Tuesday.

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

-- Written by a member of TheStreet Ratings Staff

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