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 reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. 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:
- Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that STJ's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.58 is high and demonstrates strong liquidity.
- The gross profit margin for ST JUDE MEDICAL INC is currently very high, coming in at 73.80%. Regardless of STJ'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 13.30% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ST JUDE MEDICAL INC's earnings per share declined by 18.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ST JUDE MEDICAL INC reported lower earnings of $2.51 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($3.43 versus $2.51).
St. Jude Medical, Inc. develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide. It operates in four segments: Cardiac Rhythm Management, Cardiovascular, Atrial Fibrillation, and Neuromodulation. St Jude Medical has a market cap of $12.47 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 15, below the S&P 500 P/E ratio of 17.7. Shares are up 15.8% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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