Spectranetics Corporation Stock Downgraded (SPNC)

NEW YORK ( TheStreet) -- Spectranetics Corporation (Nasdaq: SPNC) has been downgraded by TheStreet Ratings from buy 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 compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • SPNC's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SPNC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.82, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SPECTRANETICS CORP is currently very high, coming in at 80.70%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SPNC's net profit margin of 0.30% significantly trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, SPECTRANETICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.34 million or 88.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

The Spectranetics Corporation designs, manufactures, and markets single use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its proprietary excimer laser system, the CVX-300. The company has a P/E ratio of 180.2, equal to the average health services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Spectranetics has a market cap of $242.8 million and is part of the health care sector and health services industry. Shares are up 1.5% year to date as of the close of trading on Monday.

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