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, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 5.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income increased by 10.8% when compared to the same quarter one year prior, going from $9.00 million to $9.97 million.
- CONMED CORP has improved earnings per share by 12.9% in the most recent quarter compared to the same quarter a year ago. 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, CONMED CORP reported lower earnings of $0.00 versus $1.05 in the prior year. This year, the market expects an increase in earnings to $1.78 from $0.00.
- In its most recent trading session, CNMD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- Net operating cash flow has significantly decreased to $7.63 million or 63.14% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
CONMED Corporation, a medical technology company, provides surgical devices and equipment for minimally invasive procedures and monitoring. The company has a P/E ratio of 390.3, equal to the average health services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Conmed has a market cap of $772.9 million and is part of the
industry. Shares are up 6.4% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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.