NEW YORK (TheStreet) -- Morgan Stanley(MS) - Get Report updated its "Secular Growth Stocks" list, deleting 24 companies and adding 18 companies to the 36-stock list. Top sectors represented by the list are technology, health care and consumer discretionary.

The Secular Growth Stocks list is compiled both quantitatively -- the investment firm first scans its coverage list for buy or hold rated stocks with at least 15% expected earnings-per-share growth for the three years through 2017 as well as 10% expected revenue growth in the same time frame. Analysts are then asked to pick stocks that they had a "high conviction" for "secular growth" characteristics, regardless of the economy and including some stocks that fall outside of the original screen.

"We now have a modest bias for Growth over Value," Morgan Stanley analysts reiterated in the Oct. 7 note. "Earnings and revenue growth expectations for Value stocks are negative, but very positive for Growth. This is not due exclusively to Energy; expectations for Growth ex-Energy are actually lower."

Since the list's inception (September 20, 2010) the basket is up 128% vs. 89.9% for the S&P 500. Over the past year, the basket has outperformed the S&P 500 by 630 basis points.

"We believe that the names selected for this report can grow strongly even if the global economy grows more slowly than our current GDP forecasts. Indeed, growth stocks on the whole tend to be less impacted by cyclical forces, one of the reasons that, over time, they generally beat estimates while value stocks generally miss," the report said.

Here's the 13 stocks from Morgan Stanley's growth basket with the highest EPS growth expectations, paired with ratings from TheStreet Ratings for added perspective.

TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

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FIT

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13. Fitbit Inc. (FIT) - Get Report
Return since IPO (June 18, 2015): 22.6%
Expected Revenue Growth 2014-2017: 57%
Expected EPS Growth 2014-2017: 36%

Morgan Stanley Rating/Price Target: Overweight/$58

Morgan Stanley said: Our July 2015 AlphaWise survey gives us confidence in Fitbit's leadership position in the wearables market. We believe the wearable market is large enough for at least two successful brands long term. That view is supported by the latest survey, where Fitbit's purchase intention share improved to 17%, from 15% in the May survey, despite improving Apple Watch distribution. We also see an opportunity for FIT to drive ASPs higher through both product portfolio expansion and accessory sales (which carry higher margins), given FIT's current products are priced below the $250 average consumer spend on wearables.

TheStreet said: No Rating Available

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P

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12. Pandora Media Inc. (P)
Year-to-date return: 23.3%
Expected Revenue Growth 2014-2017: 23%
Expected EPS Growth 2014-2017: 37%

Morgan Stanley Rating/Price Target: Equal Weight/$17

Morgan Stanley said: Fundamentally, we are bullish that internet radio's superior consumer value proposition vs. broadcast radio will enable Pandora to disrupt the $15B radio advertising market. Free music is likely to continue to dominate over paid services, and we think that the vast majority of users (around 80%) are not likely to pay for music consumption.

TheStreet said: TheStreet Ratings team rates PANDORA MEDIA INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate PANDORA MEDIA INC (P) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 37.0% when compared to the same quarter one year ago, falling from -$11.73 million to -$16.07 million.
  • Net operating cash flow has decreased to -$9.92 million or 39.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of PANDORA MEDIA INC has not done very well: it is down 10.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • PANDORA MEDIA INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.19 versus -$0.15).
  • Compared to other companies in the Internet Software & Services industry and the overall market, PANDORA MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: P
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VEEV

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11. Veeva Systems (VEEV) - Get Report
Year-to-date return: -7.1%
Expected Revenue Growth 2014-2017: 34%
Expected EPS Growth 2014-2017: 38%

Morgan Stanley Rating/Price Target: Overweight/$40

Morgan Stanley said: A Vertical SaaS leader in the Life Sciences space, Veeva should be able to parlay its leadership in Sales Force Automation into new market segments like Data Management and Content Management, expanding its total addressable market and increasing the company's lead as the preferred Cloud provider for Life Sciences IT. While revenue growth looks healthy, Veeva's vertical focus supports high margins as well, making Veeva the rare example of a software company growing over 30% while also delivering ~30% operating margins.

TheStreet said: TheStreet Ratings team rates VEEVA SYSTEMS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate VEEVA SYSTEMS INC (VEEV) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VEEV has underperformed the S&P 500 Index, declining 14.67% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has declined marginally to $15.18 million or 8.58% when compared to the same quarter last year. Despite a decrease in cash flow VEEVA SYSTEMS INC is still fairing well by exceeding its industry average cash flow growth rate of -22.99%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Health Care Technology industry average, but is greater than that of the S&P 500. The net income increased by 40.0% when compared to the same quarter one year prior, rising from $9.58 million to $13.41 million.
  • 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 Technology industry and the overall market on the basis of return on equity, VEEVA SYSTEMS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for VEEVA SYSTEMS INC is rather high; currently it is at 67.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.66% is above that of the industry average.
  • You can view the full analysis from the report here: VEEV
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CRM

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10. Salesforce.com (CRM) - Get Report
Year-to-date return: 25.5%
Expected Revenue Growth 2014-2017: 25%
Expected EPS Growth 2014-2017: 40%

Morgan Stanley Rating/Price Target: Overweight/$85

Morgan Stanley said: With a SaaS-based application suite extending from Sales to Customer Support, to Marketing, to Platform services, to Analytics and Internet of Things, Salesforce.com remains one of the best-positioned names in Software to benefit from the increased shift of applications to the cloud, in our view. Numerous growth engines combined with an improving margin profile should drive strong FCF over the next several years.

TheStreet said: TheStreet Ratings team rates SALESFORCE.COM INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate SALESFORCE.COM INC (CRM) a BUY. This is driven by several positive factors, 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, solid stock price performance, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 24.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 28.52% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CRM should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 Software industry. The net income increased by 98.6% when compared to the same quarter one year prior, rising from -$61.09 million to -$0.85 million.
  • Net operating cash flow has increased to $304.41 million or 23.79% when compared to the same quarter last year. In addition, SALESFORCE.COM INC has also vastly surpassed the industry average cash flow growth rate of -30.41%.
  • The gross profit margin for SALESFORCE.COM INC is currently very high, coming in at 81.91%. Regardless of CRM's high profit margin, it has managed to decrease from the same period last year.
  • You can view the full analysis from the report here: CRM
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DATA

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9. Tableau Software (DATA) - Get Report
Year-to-date return: -4.5%
Expected Revenue Growth 2014-2017: 41%
Expected EPS Growth 2014-2017: 40%

Morgan Stanley Rating/Price Target: Overweight/$125

Morgan Stanley said: Tableau's software reduces the complexity and inflexibility associated with traditional business intelligence tools, allowing a broader population of users to derive insights from a diverse set of data sources. By expanding the overall market opportunity to more users, DATA should sustain 30%+ growth for the next several years, in our view. Morgan Stanley's October CIO survey supported our bullish thesis, with CIOs expecting DATA to see the highest 12-month base expansion rate within BI and Analytics vendors, growing its customer base by ~17%.

TheStreet said: TheStreet Ratings team rates TABLEAU SOFTWARE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate TABLEAU SOFTWARE INC (DATA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 314.9% when compared to the same quarter one year ago, falling from -$4.57 million to -$18.98 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, TABLEAU SOFTWARE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TABLEAU SOFTWARE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TABLEAU SOFTWARE INC reported lower earnings of $0.04 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus $0.04).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
  • The gross profit margin for TABLEAU SOFTWARE INC is currently very high, coming in at 92.39%. Regardless of DATA's high profit margin, it has managed to decrease from the same period last year.
  • You can view the full analysis from the report here: DATA
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SKX

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8. Skechers USA Inc. (SKX) - Get Report
Year-to-date return: 131%
Expected Revenue Growth 2014-2017: 17%
Expected EPS Growth 2014-2017: 40%

Morgan Stanley Rating/Price Target: Overweight/$148

Morgan Stanley said: We expect strong global growth to continue due to better infrastructure, an improved brand image, and a compelling value proposition. The company is in the early innings of international expansion and sales can double over the next several years, in our view.

TheStreet said: TheStreet Ratings team rates SKECHERS U S A INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate SKECHERS U S A INC (SKX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 36.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SKX's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SKX has a quick ratio of 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 127.94% and other important driving factors, this stock has surged by 152.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SKX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SKECHERS U S A INC reported significant earnings per share improvement 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, SKECHERS U S A INC increased its bottom line by earning $2.72 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($4.98 versus $2.72).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 129.2% when compared to the same quarter one year prior, rising from $34.80 million to $79.78 million.
  • You can view the full analysis from the report here: SKX
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LNKD

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7. LinkedIn (LNKD)
Year-to-date return: -14.9%
Expected Revenue Growth 2014-2017: 30%
Expected EPS Growth 2014-2017: 42%

Morgan Stanley Rating/Price Target: Overweight/$280

Morgan Stanley said: LNKD is benefitting from the secular shift of job searching and recruiting from offline to online channels. We see considerable runway in LNKD's core Talent Solutions offering and our proprietary analysis of LNKD's large enterprise customers shows that 32% of US large enterprises are not customers, with more than half in LNKD's core industries (business services, tech/engineering, education/healthcare). Additionally, we see LNKD's Marketing Solutions business becoming the "Facebook for professional advertising," as its growing list of ad offerings - combined with LNKD's already industry-leading professional reach - should increasingly make it the go-to platform for business-to-business (B2B) advertisers spending online.

TheStreet said: TheStreet Ratings team rates LINKEDIN CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate LINKEDIN CORP (LNKD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 33.3%. 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.
  • Although LNKD's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.50, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for LINKEDIN CORP is currently very high, coming in at 85.94%. Regardless of LNKD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LNKD's net profit margin of -9.51% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 6452.0% when compared to the same quarter one year ago, falling from -$1.03 million to -$67.75 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: LNKD
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MOH

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6. Molina Healthcare Inc. (MOH) - Get Report
Year-to-date return: 21.3%
Expected Revenue Growth 2014-2017: 22%
Expected EPS Growth 2014-2017: 47%

Morgan Stanley Rating/Price Target: Equal Weight/$69

Morgan Stanley said: Medicaid pure-play managed care company with operations in a number of states including California, Florida, and Texas. The company looks well-positioned for long-term growth from 3 areas in the Medicaid space, including (1) expansion in lives, (2) dual-eligible members, and (3) the movement of new Medicaid populations into managed care or the expansion of existing programs.

TheStreet said: TheStreet Ratings team rates MOLINA HEALTHCARE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate MOLINA HEALTHCARE INC (MOH) 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MOH's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 52.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
  • MOLINA HEALTHCARE INC reported significant earnings per share improvement 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, MOLINA HEALTHCARE INC increased its bottom line by earning $1.28 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.28).
  • 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 398.6% when compared to the same quarter one year prior, rising from $7.81 million to $38.94 million.
  • Net operating cash flow has significantly increased by 283.00% to $94.08 million when compared to the same quarter last year. In addition, MOLINA HEALTHCARE INC has also vastly surpassed the industry average cash flow growth rate of 13.96%.
  • You can view the full analysis from the report here: MOH
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ABMD

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5. Abiomed (ABMD) - Get Report
Year-to-date return: 120%
Expected Revenue Growth 2014-2017: 29%
Expected EPS Growth 2014-2017: 86%

Morgan Stanley Rating/Price Target: Equal Weight/$95

Morgan Stanley said: Abiomed's post-PMA growth inflection will likely continue as management looks to ramp up marketing and educational efforts in high-risk PCI and with shock PMA approval expected in 2H CY2016. While the bulk of recent growth has been increased utilization at existing sites, management sees a clear runway as interventional cardiologists shift focus from single-vessel stenting to treatment of complex high-risk patients (CHIP) with triple-vessel disease and poor ejection fractions who are risky candidates for surgery. Longer term, management sees potential for $1.2-1.8bn in revenues by 2020, which represents ~45% CAGR over the next 5 years.

TheStreet said: TheStreet Ratings team rates ABIOMED INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate ABIOMED INC (ABMD) a BUY. This is driven by a few notable 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, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ABMD's very impressive revenue growth exceeded the industry average of 34.8%. Since the same quarter one year prior, revenues leaped by 50.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ABMD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.22, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ABIOMED INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for ABIOMED INC is currently very high, coming in at 86.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.06% is above that of the industry average.
  • Net operating cash flow has significantly increased by 242.13% to $10.91 million when compared to the same quarter last year. In addition, ABIOMED INC has also vastly surpassed the industry average cash flow growth rate of 27.56%.
  • You can view the full analysis from the report here: ABMD
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PANW

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4. Palo Alto Networks Inc. (PANW) - Get Report
Year-to-date return: 42%
Expected Revenue Growth 2014-2017: 46%
Expected EPS Growth 2014-2017: 93%

Morgan Stanley Rating/Price Target: Overweight/$201

Morgan Stanley said: With share gains driving customer base growth, a growing product portfolio expanding the TAM, further room for expansion within existing customers and a refresh cycle ramping up within its own customer base - we believe Palo Alto Networks has several engines to sustain its industry-leading growth profile. Perhaps more importantly, we believe Palo Alto Networks displays the unique combination of both durable top-line growth drivers and an expanding operating margin profile. Thus, PANW still represents one of the lowest FCF multiples on a growth-adjusted basis in our coverage group and remains our favorite story in the security space.

TheStreet said: TheStreet Ratings team rates PALO ALTO NETWORKS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate PALO ALTO NETWORKS INC (PANW) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 43.4% when compared to the same quarter one year ago, falling from -$32.06 million to -$45.97 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, PALO ALTO NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PALO ALTO NETWORKS INC is currently very high, coming in at 76.85%. Regardless of PANW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PANW's net profit margin of -16.19% significantly underperformed when compared to the industry average.
  • PANW's debt-to-equity ratio of 1.00 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.97 is weak.
  • PALO ALTO NETWORKS INC's earnings per share declined by 34.1% 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, PALO ALTO NETWORKS INC continued to lose money by earning -$2.02 versus -$3.03 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus -$2.02).
  • You can view the full analysis from the report here: PANW
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MBLY

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3. Mobileye NV (MBLY)
Year-to-date return: 19.2%
Expected Revenue Growth 2014-2017: 69%
Expected EPS Growth 2014-2017: 96%

Morgan Stanley Rating/Price Target: Overweight/$80

Morgan Stanley said: We believe MBLY is the only pure play on two of the fastest-growing and most powerful trends in the Auto industry today-autonomous cars and software. We see potential outsized revenue growth and margins compared to not just other Auto suppliers but also adjacent verticals like Semiconductors, Software, and Tech.

TheStreet said: TheStreet Ratings team rates MOBILEYE NV as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate MOBILEYE NV (MBLY) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its premium valuation and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • This stock's share value has moved by only 11.48% over the past year. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The gross profit margin for MOBILEYE NV is currently very high, coming in at 75.89%. Regardless of MBLY's high profit margin, it has managed to decrease from the same period last year.
  • Compared to other companies in the Software industry and the overall market on the basis of return on equity, MOBILEYE NV underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • MBLY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.14, which clearly demonstrates the ability to cover short-term cash needs.
  • You can view the full analysis from the report here: MBLY
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LC

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2. LendingClub Corp. (LC) - Get Report
Year-to-date return: -44.2%
Expected Revenue Growth 2014-2017: 62%
Expected EPS Growth 2014-2017: 110%

Morgan Stanley Rating/Price Target: Overweight/$23

Morgan Stanley said: LC challenges the traditional financial institutions by directly connecting borrowers to investors. It capitalizes on both cost advantages and on improvements in user experience (speed, ease of use), and appears poised for years of rapid growth as it targets what we estimate is a massive addressable market.

TheStreet said: No Rating Available

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TSLA

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1. Tesla Motors Inc. (TSLA) - Get Report
Year-to-date return: 8.6%
Expected Revenue Growth 2014-2017: 41%
Expected EPS Growth 2014-2017: 134%

Morgan Stanley Rating/Price Target: Overweight/$450

Morgan Stanley said: We estimate that ten trillion vehicle miles are driven annually. And in our view, firms with expertise in autonomous tech and networked machine learning will be able to exploit the inefficiencies in the current model. We believe Tesla may be uniquely positioned to succeed here through its own app-based, on-demand mobility service.

TheStreet said: TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 24.1%. 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.
  • After a year of stock price fluctuations, the net result is that TSLA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • TESLA MOTORS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TESLA MOTORS INC reported poor results of -$2.36 versus -$0.71 in the prior year. This year, the market expects an improvement in earnings (-$0.74 versus -$2.36).
  • The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 31.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -19.29% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$159.52 million or 4356.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: TSLA