NEW YORK ( TheStreet) -- Merit Medical Systems (Nasdaq: MMSI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 23.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MMSI's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 331.3% when compared to the same quarter one year prior, rising from -$1.97 million to $4.56 million.
  • Net operating cash flow has significantly increased by 162.17% to $15.10 million when compared to the same quarter last year. In addition, MERIT MEDICAL SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of 3.86%.
  • The gross profit margin for MERIT MEDICAL SYSTEMS INC is rather high; currently it is at 50.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MMSI's net profit margin of 5.00% significantly trails the industry average.

Merit Medical Systems, Inc. designs, develops, manufactures, and markets single-use medical products for interventional and diagnostic procedures worldwide. The company has a P/E ratio of 22.8, below the average health services industry P/E ratio of 25.6 and above the S&P 500 P/E ratio of 17.7. Merit Medical Systems has a market cap of $563.4 million and is part of the health care sector and health services industry. Shares are up 6.1% year to date as of the close of trading on Friday.

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