Laboratory Corp of America Holdings

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LH : NYSE : Health Care
$139.56 | %
Today's Range: 137.98 - 139.64
Avg. Daily Volume: 863,800
07/29/16 - 4:04 PM ET

Financial Analysis


LABORATORY CP OF AMER HLDGS's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. LABORATORY CP OF AMER HLDGS has strong liquidity. Currently, the Quick Ratio is 1.70 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 11.39% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2430.72269.1
EBITDA ($mil)506.8461.1
EBIT ($mil)381.4343.5
Net Income ($mil)198.2169.8


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)639.6619.0
Total Assets ($mil)14199.014465.2
Total Debt ($mil)6055.06787.3
Equity ($mil)5313.04769.7


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin37.3137.27
EBITDA Margin20.8420.32
Operating Margin15.6915.14
Sales Turnover0.660.49
Return on Assets4.42.97
Return on Equity11.779.0
Debt Q2 FY16 Q2 FY15
Current Ratio2.081.42
Debt/Capital0.530.59
Interest Expense53.557.9
Interest Coverage7.135.93


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)102.1100.8
Div / share0.00.0
EPS1.911.66
Book value / share52.0447.32
Institutional Own % n/a n/a
Avg Daily Volume863883.01032804.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 21.44 for the Health Care Providers & Services industry and a discount compared to the S&P 500 average of 25.07. To use another comparison, its price-to-book ratio of 2.64 indicates valuation on par with the S&P 500 average of 2.81 and a discount versus the industry average of 3.30. The price-to-sales ratio is below the S&P 500 average, but well above the industry average. The valuation analysis reveals that, LABORATORY CP OF AMER HLDGS seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LH 22.71 Peers 21.44   LH 12.29 Peers 13.26

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

LH is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

LH is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
LH 14.19 Peers 16.29   LH 0.22 Peers 0.92

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

LH is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

LH trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LH 2.64 Peers 3.30   LH 29.48 Peers 20.79

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

LH is trading at a discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

LH is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LH 1.49 Peers 0.80   LH 32.12 Peers 14.16

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

LH is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

LH has a sales growth rate that significantly exceeds its peers.

 

 

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