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 (
) 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, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 47.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- ALXN's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.90, which clearly demonstrates the ability to cover short-term cash needs.
- ALEXION PHARMACEUTICALS INC reported flat earnings per share in the most recent quarter. 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, ALEXION PHARMACEUTICALS INC increased its bottom line by earning $0.91 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $0.91).
- Compared to its closing price of one year ago, ALXN's share price has jumped by 100.46%, exceeding the performance of the broader market during that same time frame. 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.
- Net operating cash flow has increased to $101.53 million or 29.03% when compared to the same quarter last year. Despite an increase in cash flow, ALEXION PHARMACEUTICALS INC's cash flow growth rate is still lower than the industry average growth rate of 39.46%.
Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of biologic therapeutic products in the United States, Europe, Latin America, Japan, and the Asia Pacific. The company has a P/E ratio of 105.5, below the average drugs industry P/E ratio of 106.6 and above the S&P 500 P/E ratio of 17.7. Alexion has a market cap of $20.57 billion and is part of the
industry. Shares are up 49% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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