Story updated at 9:50 a.m. to reflect market activity.
Shares of MedAssets gained 3.2% to $21.91 in morning trading.
The analyst firm set a price target of $26 for the company. MedAssets' portfolio approach is a good strategy, according to Leerink analyst David Larsen. Larsen wrote that "we believe that July volumes have ticked up which implies that there may be a significant rebound to the Spend Management Division (SCM) in 3Q."
Separately, TheStreet Ratings team rates MEDASSETS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MEDASSETS INC (MDAS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MEDASSETS INC has improved earnings per share by 37.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MEDASSETS INC turned its bottom line around by earning $0.45 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.45).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Technology industry. The net income increased by 29.7% when compared to the same quarter one year prior, rising from $5.08 million to $6.60 million.
- MDAS's revenue growth trails the industry average of 15.1%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for MEDASSETS INC is currently very high, coming in at 77.36%. Regardless of MDAS'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 3.76% trails the industry average.
- You can view the full analysis from the report here: MDAS Ratings Report
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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.