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NEW YORK (TheStreet) -- Hill-Rom Holdings (HRC) - Get Report has been upgraded by TheStreet Ratings from Sell to Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HILL-ROM HOLDINGS INC (HRC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 18.2%. 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.
- Compared to its closing price of one year ago, HRC's share price has jumped by 31.78%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- HILL-ROM HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HILL-ROM HOLDINGS INC reported lower earnings of $1.03 versus $1.74 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $1.03).
- HRC's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.22 is sturdy.
- The gross profit margin for HILL-ROM HOLDINGS INC is rather high; currently it is at 50.34%. Regardless of HRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HRC's net profit margin of 2.60% is significantly lower than the industry average.
- You can view the full analysis from the report here: HRC Ratings Report