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NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company shows 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 3.8%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.66, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, EDWARDS LIFESCIENCES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for EDWARDS LIFESCIENCES CORP is currently very high, coming in at 77.01%. Regardless of EW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.75% trails the industry average.
- EDWARDS LIFESCIENCES CORP's earnings per share declined by 11.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EDWARDS LIFESCIENCES CORP increased its bottom line by earning $3.42 versus $2.47 in the prior year. For the next year, the market is expecting a contraction of 12.2% in earnings ($3.00 versus $3.42).
Edwards Lifesciences Corporation provides products and technologies to treat structural heart disease and critically ill patients worldwide. Edwards Lifesciences has a market cap of $7.74 billion and is part of the health care sector and health services industry. Shares are up 7.9% year to date as of the close of trading on Tuesday.
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