NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 23.1% when compared to the same quarter one year prior, going from $61.32 million to $75.47 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 10.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- COMMUNITY HEALTH SYSTEMS INC's earnings per share improvement from the most recent quarter was slightly positive. 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, COMMUNITY HEALTH SYSTEMS INC reported lower earnings of $2.86 versus $3.09 in the prior year. This year, the market expects an improvement in earnings ($3.64 versus $2.86).
- The gross profit margin for COMMUNITY HEALTH SYSTEMS INC is currently extremely low, coming in at 12.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.00% trails that of the industry average.
- Net operating cash flow has declined marginally to $187.31 million or 0.10% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Community Health Systems, Inc., together with its subsidiaries, provides general and specialized hospital healthcare services to patients in the United States. The company has a P/E ratio of 7.2, below the average health services industry P/E ratio of 9.3 and below the S&P 500 P/E ratio of 17.7. Community Health Systems has a market cap of $1.93 billion and is part of the
industry. Shares are up 20.2% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff