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, good cash flow from operations, growth in earnings per share and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AGN's debt-to-equity ratio is very low at 0.28 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 3.61, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $461.70 million or 44.19% when compared to the same quarter last year. In addition, ALLERGAN INC has also vastly surpassed the industry average cash flow growth rate of -14.88%.
- ALLERGAN INC's earnings per share improvement from the most recent quarter was slightly positive. 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 ($4.19 versus $3.01).
- The gross profit margin for ALLERGAN INC is currently very high, coming in at 88.90%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.63% trails the industry average.
Allergan, Inc. operates as a multi-specialty healthcare company primarily in the United States, Europe, Latin America, and the Asia Pacific. Allergan has a market cap of $28.03 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 27.3, above the S&P 500 P/E ratio of 17.7. Shares are up 6.3% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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