NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
- LIFE TECHNOLOGIES CORP's earnings per share declined by 10.3% in the most recent quarter compared to 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, LIFE TECHNOLOGIES CORP increased its bottom line by earning $1.99 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $1.99).
- Net operating cash flow has decreased to $204.49 million or 10.51% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry. The net income has decreased by 13.7% when compared to the same quarter one year ago, dropping from $110.57 million to $95.47 million.
Life Technologies Corporation operates as a life sciences company with a focus on improving the human condition worldwide. The company has a P/E ratio of 20, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Life has a market cap of $7 billion and is part of the
industry. Shares are down 34.6% year to date as of the close of trading on Friday.
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