Gen-Probe Inc. Stock Upgraded (GPRO)
NEW YORK (
)
-- Gen-Probe
(Nasdaq:
) 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, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 4.9%. 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 gross profit margin for GEN-PROBE INC is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -11.00% is in-line with the industry average.
- GEN-PROBE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, GEN-PROBE INC increased its bottom line by earning $2.17 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.17).
- Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
Gen-Probe Incorporated engages in the development, manufacture, and marketing of molecular diagnostic products and services that are used primarily to diagnose human diseases and screen donated human blood. The company has a P/E ratio of 56.9, above the average diversified services industry P/E ratio of 54.2 and above the S&P 500 P/E ratio of 17.7. Gen-Probe has a market cap of $2.95 billion and is part of the
sector and
industry. Shares are up 13.1% year to date as of the close of trading on Wednesday.
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