Rating Change #7
Team Health Holdings Inc (TMH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- TMH's revenue growth has slightly outpaced the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TEAM HEALTH HOLDINGS INC has improved earnings per share by 30.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TEAM HEALTH HOLDINGS INC increased its bottom line by earning $0.99 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.99).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 34.1% when compared to the same quarter one year prior, rising from $15.25 million to $20.45 million.
- The gross profit margin for TEAM HEALTH HOLDINGS INC is rather high; currently it is at 55.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.07% trails the industry average.
- Powered by its strong earnings growth of 30.43% and other important driving factors, this stock has surged by 38.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.