NEW YORK (
-- Pharmaceutical Product Development
) 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, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 152.0% when compared to the same quarter one year prior, rising from $18.99 million to $47.86 million.
- 49.00% is the gross profit margin for PHARMACEUTICAL PROD DEV INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.30% is above that of the industry average.
- Powered by its strong earnings growth of 90.47% and other important driving factors, this stock has surged by 29.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PPDI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- PPDI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, PPDI has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- PPDI's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 8.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
Pharmaceutical Product Development, Inc., a contract research organization, provides drug discovery, development, and lifecycle management services. It operates in two segments, Development and Laboratory Services. The company has a P/E ratio of 28.4, below the average health services industry P/E ratio of 28.7 and above the S&P 500 P/E ratio of 16.8. Pharmaceutical Product Development has a market cap of $3.3 billion and is part of the
industry. Shares are up 13.4% year to date as of the close of trading on Wednesday.
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