NEW YORK ( TheStreet) -- Conmed Corporation (Nasdaq: CNMD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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.
  • Net operating cash flow has significantly increased by 273.56% to $36.49 million when compared to the same quarter last year. In addition, CONMED CORP has also vastly surpassed the industry average cash flow growth rate of 0.93%.
  • Although CNMD's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.73 is somewhat weak and could be cause for future problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CONMED CORP's earnings per share declined by 6.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CONMED CORP increased its bottom line by earning $1.05 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.05).

CONMED Corporation, a medical technology company, provides surgical devices and equipment for minimally invasive procedures and monitoring. The company has a P/E ratio of 22.7, above the average health services industry P/E ratio of 22.1 and above the S&P 500 P/E ratio of 17.7. Conmed has a market cap of $739.1 million and is part of the health care sector and health services industry. Shares are up 0.2% year to date as of the close of trading on Monday.

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