NEW YORK (
-- VCA Antech
) 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, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $47.97 million or 49.28% 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 -3.12%.
- The current debt-to-equity ratio, 0.57, 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 0.86 is somewhat weak and could be cause for future problems.
- VCA ANTECH INC has improved earnings per share by 9.4% 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, VCA ANTECH INC reported lower earnings of $1.28 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $1.28).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $27.43 million to $30.17 million.
VCA Antech, Inc. operates as an animal healthcare company in the United States and Canada. The company has a P/E ratio of 16.1, equal to the average diversified services industry P/E ratio 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 14.9% year to date as of the close of trading on Thursday.
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