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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 26.1%. Since the same quarter one year prior, revenues rose by 45.8%. 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.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 131.67% to $72.12 million when compared to the same quarter last year. In addition, AMERIGROUP CORP has also vastly surpassed the industry average cash flow growth rate of 35.48%.
- Compared to its closing price of one year ago, AGP's share price has jumped by 97.09%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- AMERIGROUP CORP's earnings per share declined by 24.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AMERIGROUP CORP reported lower earnings of $3.83 versus $5.40 in the prior year. This year, the market expects an improvement in earnings ($3.90 versus $3.83).
AMERIGROUP Corporation operates as a multi-state managed healthcare company. The company has a P/E ratio of 31, above the average health services industry P/E ratio of 30.9 and above the S&P 500 P/E ratio of 17.7. Amerigroup has a market cap of $4.37 billion and is part of the
industry. Shares are up 53.7% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.