NEW YORK (TheStreet) -- Shares of Catamaran (CTRX) are up 0.38% to $52.86 in early afternoon trading Tuesday after Credit Suisse increased its price target to $61 from $55, while maintaining an "outperform" rating.
Catamaran, formerly SXC Health Solutions, is a provider of pharmacy benefit management services and healthcare information technology solutions to the healthcare benefit management industry.
"We believe this outperformance should be fueled by another successful selling season as Catamaran likely has further market share opportunities, opportunity for organic profitability improvement through specialty upselling, and further accretive capital deployment," Credit Suisse analysts said.
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The company reported earnings of $2.23 per share in 2014, versus $2 per share in 2013. Revenue was posted at $21.41 billion in 2014 versus $14.78 billion in 2013.
Analysts estimate earnings to reach $2.55 per share and $2.98 per share in 2015 and 2016, respectively. Credit Suisse also expects revenue to increase to $24.66 billion and $26.73 billion in the 2015 and 2016 fiscal years, respectively.
Separately, TheStreet Ratings team rates CATAMARAN CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CATAMARAN CORP (CTRX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, growth in earnings per share, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CTRX's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 53.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CTRX'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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
- CATAMARAN CORP has improved earnings per share by 11.4% 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, CATAMARAN CORP increased its bottom line by earning $1.27 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.27).
- Net operating cash flow has significantly increased by 135.14% to $234.21 million when compared to the same quarter last year. Despite an increase in cash flow, CATAMARAN CORP's cash flow growth rate is still lower than the industry average growth rate of 151.10%.
- You can view the full analysis from the report here: CTRX Ratings Report