Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, solid stock price performance, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- MDT's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 1.8%. 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.
- 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, despite the company's weak earnings results. 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.
- MEDTRONIC INC's earnings per share declined by 23.2% 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, MEDTRONIC INC increased its bottom line by earning $3.24 versus $2.83 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.24).
- The gross profit margin for MEDTRONIC INC is currently very high, coming in at 78.00%. Regardless of MDT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.77% trails the industry average.
Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. Medtronic has a market cap of $42.72 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 13.6, below the S&P 500 P/E ratio of 17.7. Shares are up 11.9% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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