For the first quarter the health insurance provider posted earnings of $2.30 a share, beating the FactSet estimate of $2.10 a share by 20 cents. Revenue grew 1.2% from the year-ago quarter to $17.64 billion, missing analysts' estimates of $17.95 billion.
Looking to the full-year 2014 WellPoint now expects earnings of $8.40 a share, up from its previous guidance of $8.20 a share. Analysts' estimates call for earnings of $8.41 a share.
TheStreet Ratings team rates WELLPOINT INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WELLPOINT INC (WLP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WLP's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 15.2%. 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.
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WLP has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to its closing price of one year ago, WLP's share price has jumped by 31.65%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WLP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- WELLPOINT INC's earnings per share declined by 32.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WELLPOINT INC increased its bottom line by earning $8.65 versus $8.13 in the prior year. For the next year, the market is expecting a contraction of 2.9% in earnings ($8.40 versus $8.65).
- You can view the full analysis from the report here: WLP Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.