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NEW YORK (TheStreet) -- Magellan Health Inc (MGLN) - Get Report has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGELLAN HEALTH INC (MGLN) a BUY. This is driven by multiple 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. Among the primary strengths of the company is its revenue growth. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MGLN's revenue growth trails the industry average of 19.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.
- In its most recent trading session, MGLN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- The gross profit margin for MAGELLAN HEALTH INC is currently extremely low, coming in at 5.30%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 2.93% is above that of the industry average.
- Net operating cash flow has decreased to $57.19 million or 32.21% 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.
- MAGELLAN HEALTH INC's earnings per share declined by 41.2% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MAGELLAN HEALTH INC reported lower earnings of $4.53 versus $5.40 in the prior year. For the next year, the market is expecting a contraction of 51.4% in earnings ($2.20 versus $4.53).
- You can view the full analysis from the report here: MGLN Ratings Report