Story updated at 9:55 a.m. to reflect market activity.
WellCare gained 0.1% to $61.62 in morning trading.
The analyst firm set a price target of $69 for the company. The upgrade is a valuation call, as WellCare's reserve metrics have shown improvement according to Sterne Agee analysts.
Separately, TheStreet Ratings team rates WELLCARE HEALTH PLANS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate WELLCARE HEALTH PLANS INC (WCG) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 32.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WCG has a quick ratio of 1.72, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in 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 104.9% when compared to the same quarter one year prior, rising from $21.52 million to $44.10 million.
- You can view the full analysis from the report here: WCG Ratings Report