NEW YORK (TheStreet) -- Shares of Endo International (ENDP) - Get Report are up by 13.54% to $68.77 on heavy volume in afternoon trading on Wednesday, continuing to spike after the company completed its $8.05 billion acquisition of privately held Par Pharmaceutical from TPG.
The purchase will drive double-digit growth for Endo's overall business while also enhancing cash flow generation and increase financial flexibility, the company said.
"We are pleased to announce the completion of this transformational acquisition that has strategically expanded our product portfolio, R&D pipeline, manufacturing and technology capacity and generics expertise for the benefit of patients, customers and shareholders," Endo CEO Rajiv De Silva said in a statement.
Following the acquisition the company now expects total revenue for the current quarter to be between $3.22 billion and $3.27 billion, with adjusted EPS between $4.50 and $4.60 per share versus its previous view between $4.40 and $4.60 per share.
Separately, TheStreet Ratings team rates ENDO INTERNATIONAL PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ENDO INTERNATIONAL PLC (ENDP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 24.0%. 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 debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.27, which illustrates the ability to avoid short-term cash problems.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Pharmaceuticals industry. The net income has significantly decreased by 1283.5% when compared to the same quarter one year ago, falling from $21.16 million to -$250.42 million.
- Net operating cash flow has significantly decreased to $12.32 million or 93.65% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: ENDP