NEW YORK (
-- VCA Antech
) 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, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 9.1%. 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.
- Net operating cash flow has increased to $27.46 million or 11.61% when compared to the same quarter last year. In addition, VCA ANTECH INC has also vastly surpassed the industry average cash flow growth rate of -95.70%.
- The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Health Care Providers & Services industry and the overall market, VCA ANTECH INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for VCA ANTECH INC is rather low; currently it is at 22.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.90% trails that of the industry average.
VCA Antech, Inc. operates as an animal healthcare company in the United States and Canada. The company has a P/E ratio of 16.4, above the average diversified services industry P/E ratio of 16.1 and below the S&P 500 P/E ratio of 17.7. VCA Antech has a market cap of $1.93 billion and is part of the
industry. Shares are up 16.7% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff