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 downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
- Compared to its closing price of one year ago, CPTS's share price has jumped by 77.54%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for CONCEPTUS INC is currently very high, coming in at 88.30%. Regardless of CPTS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPTS's net profit margin of 0.20% is significantly lower than the same period one year prior.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 86.6% when compared to the same quarter one year ago, falling from $0.45 million to $0.06 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, CONCEPTUS INC's return on equity significantly trails that of both the industry average and the S&P 500.
Conceptus, Inc. designs, develops, and markets minimally invasive devices for reproductive medical applications primarily in the United States, France, and rest of Europe. It primarily provides Essure, a permanent birth control system that delivers an insert into a woman's fallopian tubes. Conceptus has a market cap of $586.4 million and is part of the
industry. Shares are up 47.4% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff