Express Scripts Stock Buy Recommendation Reiterated (ESRX)
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- ESRX's very impressive revenue growth greatly exceeded the industry average of 14.3%. Since the same quarter one year prior, revenues leaped by 133.0%. 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.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 20.5% when compared to the same quarter one year prior, going from $324.70 million to $391.40 million.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that ESRX's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
- EXPRESS SCRIPTS HOLDING CO's earnings per share declined by 28.8% 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, EXPRESS SCRIPTS HOLDING CO increased its bottom line by earning $2.52 versus $2.22 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $2.52).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
--Written by a member of TheStreet Ratings Staff. Holiday Special: Subscribe to Action Alerts PLUS to see how Jim Cramer trades his $2.5 Million+ portfolio for 51% off the list price. Your first 14-days are FREE: Sign up today to get e-mail alerts before every trade
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