NEW YORK (
-- Heska Corporation
) has been upgraded by TheStreet Ratings from sell to hold. 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 and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$0.15 million or 119.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, HESKA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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, implying reduced upside potential.
- HSKA's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
- HSKA's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 10.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
Heska Corporation engages in the development, manufacture, marketing, sale, and support of veterinary products for canine and feline companion animal health markets in the United States and internationally. The company has a P/E ratio of 35.4, above the S&P 500 P/E ratio of 17.7. Heska has a market cap of $42.2 million and is part of the
industry. Shares are up 32.7% year to date as of the close of trading on Wednesday.
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