NEW YORK ( TheStreet) -- Addus Homecare Corporation (Nasdaq: ADUS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • ADUS has underperformed the S&P 500 Index, declining 22.09% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for ADDUS HOMECARE CORP is currently lower than what is desirable, coming in at 30.20%. Regardless of ADUS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.20% trails the industry average.
  • In comparison to the other companies in the Health Care Providers & Services industry and the overall market, ADDUS HOMECARE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ADUS has a quick ratio of 1.93, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ADUS's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share.

Addus HomeCare Corporation provides a range of social and medical services to individuals in the home. The company serves individuals with special needs who are at risk of hospitalization or institutionalization, such as the elderly, chronically ill, and disabled. The company has a P/E ratio of 8.6, below the S&P 500 P/E ratio of 16. Addus Homecare has a market cap of $52.7 million and is part of the health care sector and health services industry. Shares are up 20.5% year to date as of the close of trading on Wednesday.

You can view the full Addus Homecare Ratings Report or get investment ideas from our investment research center.
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