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 notable return on equity, revenue growth, solid stock price performance, increase in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, FONAR CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 10.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Compared to its closing price of one year ago, FONR's share price has jumped by 107.35%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FONR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 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 9.1% when compared to the same quarter one year prior, going from $1.18 million to $1.29 million.
- Net operating cash flow has significantly increased by 517.82% to $2.05 million when compared to the same quarter last year. In addition, FONAR CORP has also vastly surpassed the industry average cash flow growth rate of 9.07%.
FONAR Corporation engages in the research, development, production, marketing, and service of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases. The company has a P/E ratio of 5.7, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Fonar has a market cap of $24.5 million and is part of the
industry. Shares are up 136.5% year to date as of the close of trading on Thursday.
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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.