NEW YORK (
-- Alere Inc
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- ALR's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 8.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 7087.7% when compared to the same quarter one year prior, rising from $3.33 million to $239.57 million.
- ALERE INC reported significant earnings per share improvement 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, ALERE INC swung to a loss, reporting -$12.39 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus -$12.39).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ALERE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $64.01 million or 32.96% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Alere Inc. engages in the development, manufacture, and marketing of consumer and professional medical diagnostic products in the United States and internationally. Alere has a market cap of $1.98 billion and is part of the
industry. Shares are down 40.6% year to date as of the close of trading on Monday.
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