Story updated at 10 a.m. to reflect market activity.
Shares of Health Net fell -0.4% to $41.61 in morning trading.
The analyst firm also raised its EPS estimates for the company through 2015. Health Net is realizing operating leverage according to Sterne Agee analysts.
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Separately, TheStreet Ratings team rates HEALTH NET INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEALTH NET INC (HNT) 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 solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. 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:
- Compared to its closing price of one year ago, HNT's share price has jumped by 34.30%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- HNT's revenue growth trails the industry average of 21.2%. Since the same quarter one year prior, revenues slightly increased by 8.6%. 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.
- HNT's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HNT has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 1205.04% to $311.46 million when compared to the same quarter last year. In addition, HEALTH NET INC has also vastly surpassed the industry average cash flow growth rate of 1.11%.
- You can view the full analysis from the report here: HNT 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.