NEW YORK ( TheStreet) -- Medidata Solutions (Nasdaq: MDSO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- The gross profit margin for MEDIDATA SOLUTIONS INC is currently very high, coming in at 72.90%. Regardless of MDSO'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 7.80% trails the industry average.
- Net operating cash flow has significantly increased by 489.55% to $5.76 million when compared to the same quarter last year. In addition, MEDIDATA SOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of 13.55%.
- MEDIDATA SOLUTIONS INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, MEDIDATA SOLUTIONS INC increased its bottom line by earning $0.96 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $0.96).
- Powered by its strong earnings growth of 62.50% and other important driving factors, this stock has surged by 53.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although MDSO had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.