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Express Scripts Stock Buy Recommendation Reiterated (ESRX)

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) -- Express Scripts (Nasdaq:ESRX) 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, increase in stock price during the past year, reasonable valuation levels, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • ESRX's very impressive revenue growth greatly exceeded the industry average of 18.3%. Since the same quarter one year prior, revenues leaped by 125.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 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 73.6% when compared to the same quarter one year prior, rising from $290.40 million to $504.10 million.
  • Net operating cash flow has significantly increased by 405.63% to $2,690.50 million when compared to the same quarter last year. Despite an increase in cash flow of 405.63%, EXPRESS SCRIPTS HOLDING CO is still growing at a significantly lower rate than the industry average of 1008.71%.

Express Scripts Holding Company provides a range of pharmacy benefit management (PBM) services in North America. Express Scripts has a market cap of $48.14 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 32.9, above the S&P 500 P/E ratio of 17.7. Shares are up 9.9% year to date as of the close of trading on Monday.

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

--Written by a member of TheStreet Ratings Staff.

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