NEW YORK (
-- Kinetic Concepts Incorporated
) 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, solid stock price performance, growth in earnings per share, attractive valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 92.53% to $164.18 million when compared to the same quarter last year. In addition, KINETIC CONCEPTS INC has also vastly surpassed the industry average cash flow growth rate of -33.74%.
- KINETIC CONCEPTS INC has improved earnings per share by 27.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KINETIC CONCEPTS INC increased its bottom line by earning $3.58 versus $3.23 in the prior year. This year, the market expects an improvement in earnings ($4.57 versus $3.58).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- KCI's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
Kinetic Concepts, Inc., a medical technology company, engages in the discovery, development, manufacture, marketing, rental, and sale of therapies and products for the wound care, tissue regeneration, and therapeutic support system markets in the United States and internationally. The company has a P/E ratio of 15.4, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 16.7. Kinetic Concepts has a market cap of $4 billion and is part of the
industry. Shares are up 35.8% year to date as of the close of trading on Tuesday.
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