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 A- . The company's strengths can be seen in multiple areas, such as its 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 expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AGN's debt-to-equity ratio is very low at 0.29 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 3.67, which clearly demonstrates the ability to cover short-term cash needs.
- ALLERGAN INC has improved earnings per share by 21.5% 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, ALLERGAN INC turned its bottom line around by earning $3.01 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $3.01).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income increased by 19.8% when compared to the same quarter one year prior, going from $246.60 million to $295.40 million.
- The gross profit margin for ALLERGAN INC is currently very high, coming in at 88.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.80% is above that of the industry average.
Allergan, Inc. operates as a multi-specialty healthcare company primarily in the United States, Europe, Latin America, and the Asia Pacific. The company has a P/E ratio of 25, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Allergan has a market cap of $25.62 billion and is part of the
industry. Shares are down 3% 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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