The manufacturer and distributor of medical equipment and supplies used in homes is positioned for better times ahead, analysts said.
"We upgrade Invacare as we believe its operation fundamentals are poised to stabilize and improve moving forward," analysts said, adding, "Our sense is that management's recent actions have positioned the business for better times ahead."
Specifically, analysts said the company will benefit from the following: "Progress resolving the FDA's consent decree for its Taylor Street facility, restructuring and unit divestiture, and improved customer focus in the Lifestyle Products business."
Shares of Invacare closed higher by 1.39% at $13.14 yesterday.
TheStreet Ratings team rates INVACARE CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INVACARE CORP (IVC) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income has decreased by 9.2% when compared to the same quarter one year ago, dropping from -$12.46 million to -$13.61 million.
- 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 Health Care Equipment & Supplies industry and the overall market, INVACARE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$6.88 million or 228.84% 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 gross profit margin for INVACARE CORP is currently lower than what is desirable, coming in at 30.98%. Regardless of IVC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IVC's net profit margin of -4.10% significantly underperformed when compared to the industry average.
- IVC has underperformed the S&P 500 Index, declining 23.61% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: IVC Ratings Report